Dear Lifehacker,I've built a decent amount of savings over the years and I'm ready to start investing some of it. I've heard I should put some in the stock market, but all I really know is how to look up a company's symbol. How do I get started investing? What do I need to know?
This article is by staff writer William Cowie. Confession time: Despite a financial and business education more comprehensive than most, I never invested.
How do I get started? The author is a Forbes contributor. How Should An 18-Year-Old Get Started In
Do you hear others talking about investments and wonder how they got started? How'd they come up with the money? How'd they know what to invest in?
How to buy stocks, bonds, mutual funds, ETFs, real estate and other investments
Getting Started In Stocks - A step-by-step introduction on how to invest and succeed in the stock market.
We'll provide a step-by-step introduction on how to invest - and succeed - in this market.
That's a good start. but to be an active investor, you need to decide what your strategy will be. do you want to be a momentum investor? these investors think stocks that are rising have something going for them and could be a harbinger for future outperformance. these types of investors also look for accelerating earnings, because that's a sign the company has tapped a new product or innovation that could power earnings. one of the best books on this method of investing is how to make money in stocks: a winning system in good times or bad, by william j. o'neil. in the book, o'neil explains his "canslim" approach to picking stocks, which is based on a number of factors including stock price behavior and earnings growth.Now that you'd identified the kind of investor you are, then it's time to put together a game plan. we'll start with the passive investor first. again, a passive investor is one who doesn't really want to spend the time learning about investing or doubts he can beat the millions of other stock investors. the passive investor simply wants to get the average return for a given amount of risk. this can be done very easily now, by buying mutual funds, index funds and exchange-traded funds that track certain asset classes.The first decision you have to make is: what kind of investor do you want to be? do you think you can outsmart other players on wall street? do you think you can find outstanding stocks that are being ignored by other investors? are you willing to spend your weekends and extra time researching stocks and studying about investing? if the answers to these questions are all yes, then you are what's called an active investor. if you answered most of the questions with a no, then you're a passive investor.First, you'll need to get acquainted with financial statements. this is important because accounting is the language in which financial information is communicated. there are many books on this topic, but one of the best i've found is analysis of financial statements by leopold a. bernstein and john wild. it's fairly easy to read and does a good job explaining the parts of financial statements that investors need to know about.
Knowing the basics of investing in stocks is the best way to build wealth and make your financial dreams come true.
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