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If your savings goal is more than 20 years away (like retirement), almost all of your money can be in stocks, Waldman says. The stock market can be unpredictable, with huge ups and downs depending on how well the economy is doing, but you’re likely to make more money there than with less risky assets (like bonds, or keeping cash in a savings account). Over nearly the last century, the stock market’s average return is about 10% annually.

One type of broker isn’t necessarily better for everyone. In fact, many people use both types of services over their lifetime. A saver who is just starting out might have more reason to use a discount broker, so as to save money while accumulating assets for retirement. Given a full-service broker might charge you as much as $500 in fees to invest $10,000 in a fund, whereas a discount broker might charge as little as $5, the cost difference alone is reason enough for new investors to use a discount brokerage firm.
Commissions can play a big role in how profitable your investing can be, especially if you're only trading on a little bit of money. This is why commissions matter in investing. For example, if you're investing $100, and pay a $7 commission - that's the equivalent of losing 7% of your investment on day 1. Given that the stock market returns about 7% on average - you're literally going to be lucky to break even for the entire year!
Preferred stock, meanwhile, represents an ownership share in a company as well, only if you hold preferred shares, you're entitled to a predetermined dividend that's likely to be larger than what common stockholders receive. Furthermore, in the event of a liquidation (which is when a company shuts down operations and sells off all of its assets), preferred shareholders get paid before common stockholders, making preferred shares a less risky investment. On the other hand, preferred shareholders don't get voting rights on company matters.
If you’re on a tight budget, try to invest just one percent of your salary into the retirement plan available to you at work. The truth is, you probably won’t even miss a contribution that small. You'll also get a tax deduction, which will make the contribution even less painful. Once you're comfortable with a one percent contribution, maybe you can increase it as you get annual raises. You won't likely miss the additional contributions
"This book provides a good foundation for the beginning investor who is setting out to venture in the stock market. It tells you in plain English about the fundamentals of stock market and investment strategies to deepen your investing literacy. If you're looking for good advice on which stock to buy and when to sell it, you can find it in this book."—Best Ways to Invest Money Blog

Also note that you should only start trading stocks in a brokerage account if you have your tax-advantaged retirement savings plans maxed out, your credit levels under control, and six months to a year of living expenses stashed in your savings account as an emergency fund. Once all those ducks are in a row, then it’s time to think about investing — not before.


Don't look at the value of your portfolio more than once a month. If you get caught up in the emotions of Wall Street, it will only tempt you to sell what could be an excellent long-term investment. Before you buy a stock, ask yourself, "if this goes down, am I going to want to sell or am I going to want to buy more of it?" Don't buy it if your answer is the former.

With this information in hand, you're ready to place your trade. Enter the stock symbol for the company you want to buy (or sell). Pick an action (buy or sell). Enter the number of shares you want to buy or sell, and confirm whether you're willing to pay whatever the current price is for that stock (that's a market order), or whether you're willing to wait and hope the stock reaches a specified price (a limit order).
Plan for retirement. $100 won't get you far in retirement, but if you are still young, that $100 could be much more in 20 years. It's always a good idea to invest in your employer's 401(k), especially if your employer matches contributions. Most employers withdraw the money right from your paycheck each pay period. You set the amount and your employer handles the rest.
Mutual funds. A mutual fund is a basket that contains a bunch of different investments — often mostly stocks — that all have something in common, be it companies that together make up a market index (see the box for more about the joys of index funds), a particular asset class (bonds, international stocks) or a specific sector (companies in the energy industry, technology stocks). There are even mutual funds that invest solely in companies that adhere to certain ethical or environmental principles (aka socially responsible funds).
While there is no doubt that the most popular way to buy and sell investments is by opening a brokerage account, many new investors ask how to buy stock without a broker. For those of you who want to go down this path to business ownership, you can do so with varying degrees of success - there is no requirement that you have to work with a broker to invest in stocks or mutual funds, particularly equity funds. Direct investing offers some advantages and disadvantages, which you will need to weigh based on your personal situation, but our goal in describing how it works is to provide you with an overview so you have a better handle on how to invest without a broker by the time you're finished reading. The World's Worst Stock Investment Advice
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