How Do I Invest in the Stock Market?

Getting started in the stock market

If you’re thinking of investing in the stock market, and you’ve never done so before, it is in your best interest to do as much research and ask as many questions about it as you possibly can. It’s a very complicated place, a place where people make and lose money every single day. Some become millionaires from it, others lose everything they’ve put into it. Given its complexity and volatility, the more you know about the stock market, the better off you’ll be.

In order to invest in the stock market, all you have to do is buy some shares, it doesn’t matter how many, of a publicly traded company which is listed on the stock market. You’re buying a small slice or slices of that company, and when the company performs well you will get a dividend. A dividend is a percentage of the company’s profits. If you own shares in a company then you are a shareholder, and all shareholders get dividends when the company does well. When the company does not do well, no one gets a dividend.

An increase in the value of a share over the price initially paid for it is where people really make money in the stock market. For example, if you bought shares in a tiny computer company in 1980 for $1, and then the company hit it big with some important new software that made the tiny company a household name, then the shares would be worth much, much more now.

If you’ve been following the news lately, then you know that America has entered a period of extreme financial difficulty and chaos. In addition, the value of the stock market has plummeted. However, as any experienced investor in the stock market will tell you, it’s important to take the long view. The stock market rises and falls, and it’s important not to panic, because it will always increase in value again.

Before you invest in the stock market, be sure to consult with a financial advisor. You can never be too careful when it comes to where you put your money.

See also: MarketWatch’s Stock Exchange Game