So I decided i was going to get involved with the stock market. But i had no idea what i was doing, i just knew that my grandparents were in it, and that my grandfather would always tell me to invest in the stock market. Mainly because “You earn more interest in the stock market than you do in a bank account”. Well thats entirely true, but its also more risky. So with reward comes risk, or is it with risk comes reward? oh well i digress.
So what is the stock market? Of course thats the first question i need to know to get started. The stock market is a market where you buy stock. Well no freaking duh, but that doesnt help much for understanding. According to Wikipedia “The expression ’stock market’ refers to the system that enables the trading of company stocks (collective shares), other securities, and derivatives. Bonds are still traditionally traded in an informal, over-the-counter market known as the bond market. Commodities are traded in commodities markets, and derivatives are traded in a variety of markets (but, like bonds, mostly ‘over-the-counter’). The stock market is not a specific place, though some people use the term “Wall Street”—the main street in New York City’s financial district—to refer to the U.S. stock market in general.”
Why would i want stock? Owning stock in a company means owning part of that company. This part is called a share. If a company has issued 100 shares of stock, and you bought one, then you own 1% of that company. People who own stock are called stockholders, or shareholders. Stockholders hope the company will earn money as it grows. If a company earns money, the stockholders share the profits. Over time, people usually earn more from owning stock than from leaving money in the bank, buying bonds, or making other investments.
Sounds pretty simple so far, i buy stock let it sit until it makes me money then i sell it.. wow sounds easy. Too bad its not that easy. The hardest part (atleast for me) is deciding what stock to buy, i dont want to just buy any stock, i want to buy the stock thats really cheap and makes me really rich (if you know of any like that please let me know). So that where research comes in. Well first thing i had to do was open a brokerage account. Considering i have no idea what i was doing i went with the brokerage company that i already did my banking with Wells Fargo. After that i started looking up stocks and companies. I started by using a little search tool that Wells Fargo has, i searched for any stock under $5.00 (per share) i figured that was a good place to start. I also got a tip from a friend to look at a company called ValueClick. So right now i am looking at purchasing a couple of stocks
Signature Devices (SDVI)
ValueClick (VCLK)
Level 3 (LVLT)
Sun Microsystems (SUNW)
I dont know what ill buy yet, but stay tuned and im sure we will find out soon.