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I want to start investing in stocks. How should I get started?

February 17th, 2010 | | Tags: , , | 9 Comments | |

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Should I do online trading? What are the basics that Ineed to know? And do I have to pay taxes for capital gains?

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9 Responses to “I want to start investing in stocks. How should I get started?”

  1. Cabin John Says:
     February 17th, 2010 at 9:02 am

    When I got started, I had a great experience with buyandhold.com, though other online sites are excellent too. You probably want a couple of free trades a month, and no lower limit, so you can build your portfolio.

    I started reading Smart Money, because it got me interested and inspired to start purchasing. Other investment mags & websites can do this for you too. The important things are: 1) diversify your investments, and 2) never invest more than you are willing to lose. Another good tip is don’t get greedy! Don’t be afraid to sell a stock that’s doing well.

    A *very* common and surprising investment mistake that people make is that they buy high and sell low. Everyone knows "buy low and sell high," but what happens is that people gain confidence when the market is high, causing them to buy, and they lose confidence when it falls, abandoning their stocks for cash. Timing is everything, and a steady hand helps.

    I’d start with a range of stocks – in a recession, basic resources are a good idea. I made a decent amount of money investing in metals and dental supplies.

    Most financial sites, like Yahoo! finance, give an "analyst opinion" and other information on most stocks, which you can use to help make a decision. Also, set up one of those free portfolio trackers that will tell you how your stocks are doing, so you can stay on top of things.

    Yep – you gotta pay taxes if you made money. If you sell the stock after holding it for more than 1 year, you are taxed at the "long-term" lower rate. Less than 1 year means more taxes. Personally, I don’t worry about it too much. You only pay taxes when you make money, and if a quick sell makes more money, the higher taxes might be worth it. There are great strategies on offsetting taxes, though (hold for 2 years, reinvestments, tax-deferred investments, and offsetting gains by selling depreciated stocks). A financial adviser can help you with that, or you can figure it out for yourself if you’re willing. There are *plenty* of books – I particularly like the books by Ric Edelman, who advocates an optimistic but cautious investment plan.

    I recommend investing online to everyone, as long as you don’t invest beyond your comfort range. If you do "week-trading" (like day-trading only waiting a little longer), you can usually make money, unless the economy is horrible. It’s like gambling, only the odds are in your favor! I like it better than Vegas – it requires patience, but it’s a great mind game.

    Good luck!

    CJ

  2. Steve D Says:
     February 17th, 2010 at 9:02 am

    You need to start by going to the library and checking out some nooks on basic investing. If you do not know the basics of evaluating stocks and how to open an account and trade, you should not be trading yet.

  3. knowitall Says:
     February 17th, 2010 at 9:02 am

    You do not pay taxes until you sell the stock. Capital gains is if you sell it sooner than 2 years. Start with stock in something you know and use and like – Google, MSN, etc

  4. Ryan M Says:
     February 17th, 2010 at 9:02 am

    1) Start with mutual funds or ETF’s until you get the hang of the market.
    2) Unless you are trading retirement funds in a IRA or 401k, OF COURSE you will have to pay taxes on capital gains! Why wouldn’t you have to when everyone else does?

  5. Bill Says:
     February 17th, 2010 at 9:02 am

    If you’re asking on Yahoo you’re not ready to start investing.
    You’d lose your shirt.
    You need to get some books on stock investing, maybe join a investing club.
    90% of the people who day trade lose money. That sounds like what you want to do.

    Yes, you will have to pay capital gains.

  6. Randy Says:
     February 17th, 2010 at 9:02 am

    You need to open up an account online. The cheapest that is very reliable is Scottrade.com. What you need to do is:

    1. Go to Scottrade.com and open an account
    2. Deposit your money into your Scottrade account
    3. Research companies
    - if you dont know anything about stocks there is a knowledge center that will teach you all you need to know about basic stocks. I didnt know anything when I started, I taught myself.
    4. Bid on a stock with how many shares you would like.
    5. Make money out of money.

    If you really do the research and stick to it, you can really make some money. Its a blast! I’ve been using them for a while so if you have any questions feel free to email me at b.alexander68@hotmail.com. It might sound hard but it really isn’t.

    Scottrade.com $7 Stock Trades

    If you want 3 free trades when you sign up, just use this code:

    ****** QDOB2020 ******

  7. Devil Says:
     February 17th, 2010 at 9:02 am

    you need to open an online accoutn first, Personally, I think sogotrade is best among all online brokerages. You can get a lot of free trades: about 100 free trades with 500 minimum deposits. It has very good customer services, it also has live help, and you can chat with representatives about any question. After that, only 3 dollar for each trade, pretty sweet when compared with other online brokerages.
    Referral code: 453934
    regarding the tax, if you sell stock within `1 year, that count at short term capital gains, which will be tax at ur income level. if you hold more than 1 year, and then sell it, they will be taxed at 5 percent…hope that helps.

  8. Gerry, Louisiana Says:
     February 17th, 2010 at 9:02 am

    Before jumping into trading using real money, try going to investopedia.com and practice trading using the simulation game. In the Simulation game you will be able to learn how tricky stock prices can be during trading sessions. This way you will learn about entering and exiting stocks if your intention is to trade stocks for profit.

    This site also contains a lot of basic education on stocks and trading.

    About how trading stocks whether through a broker or online, you might probably want to know if you wanted to be assessed or not. If your broker helps you in picking good stocks, why not paying the commisions? If you don’t get a good broker to help you into picking stocks, you’d better do it online and avoid commissions. If you are going online investing, go to scottrade.com and register an account. Use any US bank and transfer funds from your account to the scottrade account. Then the process of buying stocks is very easy. Use the code LJEN3956 and your first three stocks trades will be free. You can later find ways to earn more free trades. I’ve been trading with scottrade for free since I opened my account.

    About paying taxes for capital gains, you can declare gains and losses in your income tax. Whether you make profits or losses, all those will go on your income tax. You can only declare gains or losses after finishing transactions. THat is, if you invest on a stock this year and sell it next year, that money is going to stay invested until you sell your stocks. The difference between the purchase price and sell price will determine your gains and losses and those have to be reported in the year the transaction was made. IRA accounts don’t have that problem and the investments on IRAs can be deducted from income

  9. Donald Z Says:
     February 17th, 2010 at 9:02 am

    Invest in your education and learn to read charts. Trade to make money on your money. I don’t buy and hold, I trade. Master the charts is my advise. I have a proven system that will produce short term profits. I don’t look for P/E ratios or anything like that. I am a technical trader. I use indicators that move with the price of the stock. Buy and Hold are of the past. Buying the actual stock produces far less results than if you traded the stock option. If you’re looking for a winning recommendation service that produces 90% accuracy on the stock market using Options, contact me for some recommendations.
    Email me at openrangetraders@gmail.com to stop them losing trades.

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