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Any time is the right time. It takes most people of years to really understand and learn to invest successfully. So it is important to get started in order to get the learning curve underway. You should not wait until you get the perfect job or reach a certain age. You will find that with it of courage, preparation and determination, it can be well worth it.
You open an account with a brokerage firm. It is very simple, much like opening an account at a bank. It boils down to filling out a few forms. Do not be afraid to ask questions.
First you have to decide whether you will go with a full service broker or a discount firm. If you are a new investor, a full service brokerage might help in your education, since you will have a broker who may be able to answer your questions.
It is important to know that not all brokers do well in the market, so selecting a good one is critical. I had suggest that you speak to the office manager. Explain you are instated in opining an account but want to focus on brokers who have made money in their own accounts as well as for the majority of their clients.
Find out something about the stock broker you are considering what books they are read, what services they follow, where they get their information and what their general investment philosophy is. It is important to know that their data sources are of high quality.
If you opt for a discount brokerage, you want service and quality from a firm that is likely to stay in business for many years.
Plan to spend at least several hours each week keeping track of your investments and the market.
Be very careful when listening to other people and their advice. Most of it will be nothing more than personal opinion and is probably faulty.
You should subscribe to a chart service and learn to read charts.
Being a new investor, you should avoid the most speculative area, such as low priced stocks, futures, options and foreign stocks because of their risk and volatility.
With low price stocks, you get what you pay for. I would rather buy 50 shares of $60 than 300 shares of a $10 stock. Institutional investors will put millions of dollars into the $60 stock.
You want to invest your dollars in the best companies, not the cheapest. Most of the outstanding companies you select to invest in should be between $15 and $150 a share.
The important things are to get started and gain experience.
There is no reason to own twenty or more stock. You simply cannot know all you need to know about that many. You will also dilute your overall results.
For the individual investor, real money is made first by buying stocks of the very best companies in their fields.
Do not believe in the principle of wide diversification or trying to reduce risk by spreading your money across many stocks or many types of investment.
