Information on Investing in the Stock Market

By Larry Parr

Overview

Getting information on investing in the stock market is easy--the trick is in determining which information is valid and which is provided only with an eye toward parting you and your cash. Let's face it, if the majority of stock market advice was worth anything at all there would be a lot more stock market millionaires and a lot fewer people going belly-up in the market. When you are looking at stock market advice one of your best defenses is to look at the track record of the person giving you the advice, as well as looking for any ulterior motives behind the advice. This is particularly true in the penny stock market (stocks trading under $5.00 per share) where handing out advice to buy a certain stock can artificially inflate the price of the stock on a temporary basis and allow an "advisor" the opportunity to sell his shares at a profit.

Step 1

Decide which companies you are interested in investing in and then do your own on-line research. Look for market share and look at the company's balance sheet. How much debt does the company have and what percentage of their current income goes toward making payments on that debt? Are there new products in development? Is the company gaining or losing market share?
Step 2

Open a trading account either online or offline. Fund your account.

Step 3

Decide on what type of trading strategy is going to work best for you. Are you interested in a long term investment strategy (buy and hold) or are you more concerned with short-term profits? Or perhaps a combination? The type of investing or short-term trading you are interested in will determine the type of stock advice you will be looking for.
Step 4

Research several stock market advisory services such as Motley Fool, Morningstar and others. Do not get caught up in the hype of what any of them are telling you. Instead, look up their track record and see how well their advice has worked out in the past. One company that rates stock advisory services is pro-trading-profits. See the Resources section below for links.
Step 5

Find one or more stock market forums online. Ask questions about any advisory service you are considering and see what the opinions of others who may have tried the service are. See the Resources section below for a link to a diversified stock market forum.
Step 6

Choose a service that has good reviews, a good track record, and which you feel comfortable with and confident in. Subscribe to their service and see how well their advice works for you in real-world trading. Don't be afraid to change advisers if you discover that one service's advice is not working out.

Skill: Easy
Ingredients:
Internet access
Tip: Stock trading is not for everyone. Investing in the stock market is risky regardless of whose advice you may follow, and there is the very real chance that you could lose your entire trading account.
Tip: Only trade discretionary funds.
Warning:
Be cautious about trading with margin funds--margin funds are funds loaned to you by a stock broker. Trading on margin allows you to buy more shares than you could if you were only trading with your own money, but if the market goes strongly against you, you could end up owing your broker a lot more than you can afford to pay.

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