how do you start investing in the stock market?
TRANSCRIPT
How Do You Start Investing in
the Stock Market?By www.ProfitableInvestingTips.com
http://profitableinvestingtips.com/stock-investing/how-do-you-start-investing-in-the-stock-
market
If you have saved some money
or come into an inheritance you
probably want to invest.
http://profitableinvestingtips.com/stock-investing/how-do-you-start-investing-in-the-stock-
market
Over the long run the stock
market outperforms investments
such as real estate or money in
the bank.
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market
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http://profitableinvestingtips.com/stock-investing/how-do-you-start-investing-in-the-stock-
market
And stocks are a liquid
investment in that you can buy
and sell much more easily than
with real estate.
http://profitableinvestingtips.com/stock-investing/how-do-you-start-investing-in-the-stock-
market
Investopedia compares the stock
market and real estate as
investment vehicles.
http://profitableinvestingtips.com/stock-investing/how-do-you-start-investing-in-the-stock-
market
For the 38 years between 1975
and 2013 a $100 investment in
the average home (as tracked by
the Home Price Index from the
Federal Housing Finance Agency
(FHFA)) in 1975 would have
grown to about $500 by 2013.
http://profitableinvestingtips.com/stock-investing/how-do-you-start-investing-in-the-stock-
market
A similar $100 investment in the
S&P 500 over that time frame
would have grown to
approximately $1,600.
http://profitableinvestingtips.com/stock-investing/how-do-you-start-investing-in-the-stock-
market
If you are interested in making
your money work for you over the
long term, how do you start
investing in the stock market?
http://profitableinvestingtips.com/stock-investing/how-do-you-start-investing-in-the-stock-
market
The first step is to take a look at
your finances and your expenses.
http://profitableinvestingtips.com/stock-investing/how-do-you-start-investing-in-the-stock-
market
In fact how to start investing in
stocks is to get your financial
house in order first and then start
picking stocks.
http://profitableinvestingtips.com/stock-investing/how-do-you-start-investing-in-the-stock-
market
Pay off Your Credit Cards!
http://profitableinvestingtips.com/stock-investing/how-do-you-start-investing-in-the-stock-
market
If you have credit card debt you
are paying between 13% and
20% a year on what you own the
credit card company.
http://profitableinvestingtips.com/stock-investing/how-do-you-start-investing-in-the-stock-
market
It is difficult for an investor to
routinely make this kind of a
return on stocks so your first
move should be to pay off your
credit card debt.
http://profitableinvestingtips.com/stock-investing/how-do-you-start-investing-in-the-stock-
market
You Need a Place to Live
http://profitableinvestingtips.com/stock-investing/how-do-you-start-investing-in-the-stock-
market
It will cost you less over the long
term to own your home than to
rent.
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market
And the interest on your
mortgage is tax deductible.
http://profitableinvestingtips.com/stock-investing/how-do-you-start-investing-in-the-stock-
market
A Rainy Day Fund
http://profitableinvestingtips.com/stock-investing/how-do-you-start-investing-in-the-stock-
market
It is all too common get trapped
in a job with no future because
you have no cash reserve.
http://profitableinvestingtips.com/stock-investing/how-do-you-start-investing-in-the-stock-
market
And it is all too common to lose a
job and not be able to find one for
six months to a year.
http://profitableinvestingtips.com/stock-investing/how-do-you-start-investing-in-the-stock-
market
Regarding investments you do
not want to have to pull money
out of a stock investment just as
the market retreated.
http://profitableinvestingtips.com/stock-investing/how-do-you-start-investing-in-the-stock-
market
So, before picking stocks it is
wise to have six months-worth of
living expenses in the bank.
http://profitableinvestingtips.com/stock-investing/how-do-you-start-investing-in-the-stock-
market
Now It Is Time to Pick
Stocks
http://profitableinvestingtips.com/stock-investing/how-do-you-start-investing-in-the-stock-
market
As you start investing in the stock
market think about you goals.
http://profitableinvestingtips.com/stock-investing/how-do-you-start-investing-in-the-stock-
market
Do you want to save for
retirement? Are you putting
money aside to pay for your
child’s college education?
http://profitableinvestingtips.com/stock-investing/how-do-you-start-investing-in-the-stock-
market
Are you looking to make lots and
lots of money and are you willing
to take on the risk that goes with
aggressive investing?
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market
Last week we wrote about how
to pick dividend stocks.
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market
These are stocks that you will
buy and probably hold until
retirement and after.
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market
They will appreciate some in
value and they will pay you a
dividend every quarter.
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market
A conservative investor will load
up on these stocks whenever
they have money to invest.
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market
The ideal growth stock is in a
new market.
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market
The classic example is Microsoft.
Paul Allen and Bill Gates founded
the company in 1975 and took it
public in 1986.
http://profitableinvestingtips.com/stock-investing/how-do-you-start-investing-in-the-stock-
market
If you had purchased 100 shares
at $21 each at that time you
would now have 28,800 shares
after nine stock splits.
http://profitableinvestingtips.com/stock-investing/how-do-you-start-investing-in-the-stock-
market
Today the stock sells for $53 a
share making your total holdings
worth $1,526,400.
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market
And you would be receiving
$40,320 in dividends every year.
http://profitableinvestingtips.com/stock-investing/how-do-you-start-investing-in-the-stock-
market
The obvious choice if you want to
make tons of money is to pick the
next Microsoft.
http://profitableinvestingtips.com/stock-investing/how-do-you-start-investing-in-the-stock-
market
Your best bet for doing this is to
invest in stocks of companies that
you know something about.
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market
Look for low price to earnings
ratios of solid companies.
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market
And invest in a sufficient number
of startups so that you increase
your chances of hitting a home
run while seeing several of your
start up bets go out of business.
http://profitableinvestingtips.com/stock-investing/how-do-you-start-investing-in-the-stock-
market
In the end the best approach is
to diversify your investment
portfolio with a mix of
conservative and aggressive
stock picks.