- 1). Research companies you enjoy. Understanding the stock market is easier if you start by tracking your favorite corporations. Look for companies that make products and services you admire and create a list of these firms.
- 2
Follow Your Stocksbusiness boy six image by Paul Moore from Fotolia.com
Follow stocks on internet sites. Use the list you created to look up which companies are "public". "Public" means they're traded on a stock exchange. You're looking for a "ticker symbol" for each company. This symbol identifies the company stock in the investment world. There are many websites to research ticker symbols and to track stocks. Yahoo! Finance is a popular spot. You'll key in the ticker symbol of each company, followed by an arbitrary number of shares (100 is a popular number). - 3). Review the price movement of your stocks at least weekly. Stocks will fluctuate in price because of a number of variables, including overall market conditions (the overall market will value stocks higher or lower on any given day), product announcements, and political wrangling. Many websites such as Yahoo! Finance, BigCharts,and Clearstation feature charts that show the current stock price, historical prices, and data on stock trends. To view the chart, you'll only need the ticker symbol for each stock. Nothing helps you understand the stock market like tracking the rhythm of a few companies to get used to the price movement.
- 4). Learn bond investing basics. Once you're comfortable with stocks, begin your research on buying bonds. Begin with websites that explain how bonds work. Focus on phrases like "maturity date", "coupon", and "credit rating". Getrichslowly.org, cnnmoney.com, and the Yahoo! Finance education center all offer many pages on basic bond investing to help you get comfortable with these terms and others.
- 5
Track Bond Indexesbusiness boy one image by Paul Moore from Fotolia.com
Track bond indexes. The bad news: When you're first starting out with investing in bonds, it's far more complicated than stocks. Individual bond prices aren't as transparent and easy to find as stocks. The good news: Bonds move more uniformly based on the overall market than stocks. Bond indexes are a great way to begin tracking the ebb and flow of bond market reaction to news data. Popular indexes are found in many places, but iShares is the largest provider in the world of bond index investments. - 6). Invest small amounts of money in a few stocks and bond indexes. "Skin in the game" will give you a feel for your emotional reaction to price fluctuations. Find a reputable discount broker and purchase a few shares of stock, mutual funds, or an index. This can be accomplished online or offline through a myriad of brokerage options.
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