How to Get Started Investing in the Stock Market
Author: Jason Markum
So you've got a few bucks put aside and are disgusted by the close to 1% interest your local bank is paying on your savings account. And you're thinking that maybe it's time to start investing in the stock market. Well you've come to the right place! First of all, I will tell you that I'm not a licensed financial planner in any way shape or form (though I did get a degree in economics with honors from one of the best schools in the world). And I don't do this for a living. That being said, I can help you greatly! First of all, get the notion of investing in the stock market out of your head right now. You are not going to open a stock trading account online or with your local stock broker and pick some stocks to buy. That's what most people do when they first get started and most people lose all their money. But not you, you are smarter than that, you are doing a little research first and you are listening to me! They say that the stock market returns an average of 6-8% per year. That's only *sort* of true. That only works if you take the stock market on whole, and then average it over like thirty years or more. That does NOT mean that if you just buy some stock in some company, even a good company, that you are going to make 6-8% per year guaranteed. So where does that leave us? Index funds. There is a way to buy "the whole" stock market and they are called index funds. For instance, the S&P 500 index. You probably hear them talk about the S&P 500 every night on the news. When most people say "stock market" they are often referring to the S&P 500 or some other broad stock market index. It is made up of the top 500 leading companies as determined by S&P. See how that works? The trick is to go to Vanguard or some other reputable mutual fund company and get an account with them that allows you to direct deposit X percent of your paycheck each month and have that money credited to your S&P 500 index mutual fund with no fees. It doesn't have to be much, a hundred bucks a month, fifty, a thousand, whatever you are prepared to invest each month have them direct deposit it from your paycheck or from your bank account on the same day each month. If you do this, THEN you will receive that 6-8% stock market increase that is the historic average because you are investing in the market as a whole and not just a couple of risky companies. Of course this return is not absolutely guaranteed, anything could happen, but this is one of the safest ways to get into the stock market and almost guarantee those safe 6-8% returns. That's how it is done. This way you can set it up and forget about it and be assured that your money is as safe as possible for a stock market investment. That way you are diversified in case a few companies go down, which you are not if you simply pick a few stocks to buy.About the Author:
Jason has been writing articles online for over thirteen years. When not writing about investing, Jason runs a cool
dinnerware web site where he reviews
dinner plates if you can believe it!
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