Why Invest?

Money kept in a “savings” account is earning interest at rates that don’t even keep pace with inflation, so you need to find the best place to put your money to beat inflation by a substantial amount. Average interest rates on savings account are currently less than 3-4%. Average annual returns for mutual funds are over 10%. Don’t understand what a mutual fund is or where you can find investments that will serve you well? You are in the right place to learn how to earn.

There is always risk in anything you do, but with education and research you can minimize that risk. As you get more education you can better decide how much risk you want to take and conversely how much return you need to make. Understanding the risks is the first step toward minimizing them. In fact, it is possible to make 10-15% annual return on your investment with almost no risk, if you know what you are doing. One strategy that investors have been using for years is that of diversification. You do this by having investments in a range of different companies from blue chips to tech stocks, while also having some investments in bonds. To get a nice range of stocks some people use mutual funds to spread their investments without having to do a lot of research on different companies. This gives you diversification, and also has a professional taking care of the research end of that part of your investment portfolio.

There are many paths you can go down when you get into investing in the stock market, but one thing you can be sure of. With education and research you will make money. You are already beginning your education here, that’s a great start. Continue on this road and make your money work for you.

So, what is a broker?

A broker is the person who handles transactions (mediates deals) for you when you are investing. The term can be used to describe the actual person that you are dealing with one on one or it can be used to describe a firm, such as India Bulls. (Some of you may remember the old commercial saying "my broker is Religare and he says"...) Today you are probably more familiar with Religare, Prrsaar or India bulls, but if you watch any television or surf the internet, you certainly have seen ads for them, etc. Prior to the internet (in the stone-age) there were very few alternatives for the individual investor apart from dealing with a broker or getting your own license. You would be forced to deal with a broker whether the broker was a "full service" broker, meaning they would tell you what to invest in and would control your portfolio, or a "discount broker" who would charge less, but would only carry out your orders, not give recommendations or manage your account. When people are talking about the stock market, the first thing that usually comes to mind is the New York Stock Exchange. But what are stocks? Why is the stock market such a big thing? How do you invest in the stock market?

What are stocks?

Before you delve into the intricacies of the stock market, the first thing you should understand is what exactly a stock is. Stocks, which are also known as shares, are portions of companies that people can buy, and therefore own part of the company. But even though you may own a part of a company, only those who have invested a lot of money into the company have any real say in how the company is run. There are two different types of shares: preferred shares and common shares. When you invest in common shares, there is a greater risk of losing part or even all of the investment that you have put into the company should the company stop functioning. Why is this? Because creditors, bond holders and preferred shared holders have a higher rank than the common shareholders, and because of this they will get the first chance to get some of the money they have put in if the company goes out of business. By the same token, the investors who have preferred shares have a higher standing than the ones with common shares, but still have to get in line behind the creditors when it comes to how much of the company they own, or getting paid if the company goes out of business. In addition to having more of a say in the company decisions than those who have common shares, investors who have preferred shares can also look forward to higher dividends.

There are two ways to purchase stocks - investors can either use a brokerage, or buy their stocks through Direct Investment Plans or Dividend Reinvestment plans. If you decide to purchase stocks through a brokerage, you can go one of two ways. If you are going to trust the experts to do the right thing, and leave it in their hands, then you should go with the services of a full service brokerage. But, if money is a consideration and you don't want to spend the money on a full service brokerage, you can go with a discount brokerage. Even though discount brokerages cost less than full service brokerages, they don't offer the same amount of assistance that the full service brokerages do. If you decide to invest using a Direct Investment Plan or a Dividend Reinvestment Plan, check to make that the company that you are interested in investing in offers such plans because not all of the companies do.

History of the Stock Exchange

One of the biggest misconceptions is that the first stock exchange in America was the New York Stock Exchange. But those who think that this is true might be surprised to find out that the first stock exchange in America was actually in Philadelphia, PA, and it was founded in the year 1790. The very famous New York Stock Exchange was not founded until two years later, in 1792. Another thing that you hear talk about with regards to the stock exchange is Wall Street. Sometimes people wonder how it got its name. That is actually a very interesting story. Back in 1653, a twelve foot stockade was built by the Dutch settlers to guard against British and Native American attacks. The sturdy wall stood for over 30 years, until 1685. At that time, the wall was torn down and a street was built in it's place - hence the name Wall Street. The stock market has evolved greatly over the past few centuries. From its humble beginnings in Philadelphia, PA, to the New York Stock Exchange, which is known worldwide, the stock market has grown in leaps and bounds. That's not to say that there haven't been problems. Most everyone has heard of the great stock market crash of 1929. There are now steps that the government has taken to prevent such a large crash from happening again, but that doesn't mean that the possibility still isn't there. The stock market is a place where you can make a lot of money but you can also lose a lot of money as well. If you have decided that you want to try investing in the stock market, it's a good idea to do some research and get advice from people that you trust and who are already investing in the stock market. But be careful, because if you don't invest wisely you can lose a lot of money. Be wise with your investments and take the time to do your homework. This will help you to make the right decision when it comes to your investments.

How to invest?

If you are interested in learning the fundamentals of investing, you have come to the right place. Our primary mission is to educate the people how to invest in the stock market and other investment opportunities. The information here will help you to better understand the stock trading and other investment vehicles. I will teach you how to invest your money for the greatest possible gains while reducing the associated risks in the stock market and other investing opportunities. The lessons I have learned during my investment career are passed on here to help guide you through the sometimes confusing world of the stock market. This information will give you the knowledge and expertise to make informed decisions regarding your portfolio. I know there are many people out there who want to learn how to invest, but are apprehensive because they just don't have the education or the background to make informed choices. And admittedly there are many financial websites that you can visit to try to gain a better understanding of stock trading, and investing in general. The advantage here is that I designed this site to be extremely user-friendly with step by step instructions on how to invest that other investing websites do not match.

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