So I am starting to get a real interest in stocks and in the near future I wish to start investing in the stock market.

My question is, where do I learn how it works, how to find good companies to invest in, and how to not lose money?

I have a pretty good idea of how to read stocks, but I do not know more than the basic things. I'm in college now and I will not start investing till I get an actual career, but I wanna start learning now so when the time comes, I'll know what I'm doing. I'm planning setting a budget and making a portfolio using google finance with fake money of course to see how it goes. But I dont wanna just pick random companies. I want to learn how to tell if the company is going in a good direction and how to find those not so popular companies.

Any links or advice will be helpful thanks!

 

A great topic you started. I have been investing in Stocks for 23 years and things have changed much over the years. You can read books, but there are great Web sites available as well. Trust me, you can play all you want with imaginary money but it's not the same as having real money on the line. The game is a lot different with real money than monopoly money and you will need to manage the emotions of fear .vs. greed.


I recommend the following:

1. Reading the Investors Business Daily on a monthly basis at a minimum. This newspaper has lots of good advice and screens stocks pretty well. You should probably read William Oneal's book on 'How to make money in Stocks' which profiles many of the principals found in his newspaper.

2. Read some of the Motley Fool books and check out their web site (www.motleyfool.com)

3. Read 'Reminiscences of a Stock Operator'. This is a classic book and a great read for all.

4. Learn about Bullish Percents- you can read about them at www.stockcharts.com and the Dorsey book on Point & Figure charting introduced me to them. The NYSE BP has been a great barometer for me as to when a market is toppy or near a bottom. For example the BP changed on 5/5/10 and I had a few hours on 5/6 and 5/10 to sell a lot of stock and lock in profits- so far these moves have saved me 1000's of dollars already. I think we're in a bear market for a while now. Once the BPs get down to sane levels, I'll get back and buy long positions and cover shorts that I have now. To be successful, I think you need to know how to play in both bull and bear markets.

5. Learn how to read financial statements and do your own technical analysis- don't depend on professionals unless you have too. I have lost the most money after I gave a so-called professional 1/2 my portfolio to manage- he managed to lose 1/3 of this in a matter of months playing with options that pay big commissions for him and are very risky for consumers. You have to not only be right in direction but also timing which is a tough undertaking most of the time. That was a big lesson that taught me to be more self-sufficient and I haven't had a losing year since 2001 with the money manager debacle.


Well here you go. This is a quick summary of 23 years worth of trading. I would have loved to get advice like this when I started out. I hope this advice does you well.

 

Since you're in college, I'd highly recommend taking a finance class. That will teach you basics you need on company valuations. This will be helpful to compare companies when you are interested in investing. You may be looking at two stocks, and it will be good to learn how to learn "the ratios" like Debt/Equity, Quick Ratio, Interest Coverage, etc to compare the two.

Learn how to read a Balance Sheet, Income Statement and Cash Flow statement. You'll want to look at those for the companies you are investing.

A favorite site of mine is http://www.investopedia.com. The financial dictionary is very helpful.

By doing the stuff above, you'll be doing more than 99% of people that throw money into the stock market.

I use some of the stock screener features on TDAmeritrade to find stocks that fall into various criteria that I might be looking for. Other times I might learn about companies from friends, or invest in companies that have been beaten down un-necessarily.

Good luck!

 

Thanks for the tips guys

I'll probably get started once this quarter ends.

 

yo
how does this portfolio work on google finance. i also want to start investing but would like the practice and get used to it.
im getting confused where i add symbol and add transaction data.
say i buy 2 shares of a stock, the price is already given by what its already trading at right? so what goes in the price text field?