Keep Your Investing Head Clear!

The hardest thing I found about buying stocks and shares is keeping your head when everyone else around you is loosing theirs! It can be quite easy to get caught up with the herd and acting in the same way they do. When I first started trading I was obsessed with checking my stocks every day. Well that's a lie, it was all day every day. Having that little ticker in my browser at work became natural, a point here and point there would affect my mood. In the end it's not a big deal.

This is one thing that beginners in the stock market have a real hard time with. Warren Buffett has always said that the best time to sell stocks is....never! Forget about the 1 or 2 point gains. If you do your research properly in the first place you're buying into a good company. You just have to realize that buying stocks is a long term investment. To buy and sell constantly is foolish. You'd end up loosing more in commission to the stock brokers than you'd actually make in the sale.

So in summary, do your investment research properly at the start. Buy your stocks and hold...unless of course the business model changes...

Understanding Bear and Bull Markets

One of the terms you'll hear most frequently when trying to work out how to invest in the stock market is a bear and a bull market. So what does this actually mean? In it's simplest term, a bull market can be described as optimistic. Investors feel that prices are due to rise. A bear market can be described as pessimistic. Investors feel that stock prices are on the way down. As you can imagine a bear market is a self fulfilling prophecy as investors feel the price is coming down so sell shares rather than buying which adds to prices being driven down.

One of the most famous bear markets was the Wall Street crash of 1929 where 89% of market capitalization was completely wiped out. Marking the start of the Great Depression. In more recent times bear markets have occurred between March 2000 and October 2002 when the Internet bubble burst. Then of course depending on who you listen to we're living in a bear market right now with the current financial crisis!

Where did these names come from? One explanation is related to the way each animal attacks its opponents. That is, a bull will thrust its horns up into the air, while a bear will swipe down. These actions were then related metaphorically to the movement of a market: if the trend was up, it was considered a bull market; if the trend was down, it was a bear market.

As I mentioned earlier a bear market can be seem as pessimistic as the stock prices are tumbling. In a sense it can be seen as positive for the investor as its likely there will be bargains to be had with undervalued shares. It really depends on your point of view and what kind of investor you are! Hopefully this post clears up any mystery and act as a step in the right direction!

Welcome

Hi and welcome to How to Buy Stocks for Beginners! With the current credit crisis there are bargains galore in the stock market. There has never been so much value for money and with the web it's so easy to buy stocks online. Stock prices continue to tumble but this the best time to invest. But don't dive into your wallet right away! Good research is the key. Beginners at stock trading should take the time to get the education they need in order to succeed. It takes time and knowledge to be good at anything in life and this include buying stocks.

I will never tell you which stocks to buy but I will point you in the right direction of what to look out for. Hopefully through reading this blog you will be able to spot a bargain or two. One piece of advice I've always adhered to is 'buying what you know'. In other words if you're a bit of a geek and know about the tech market chances are you'll know what a good product is and if a company is worth investing in. Stick to what you're familiar with and it'll at least give you a head start on someone starting from scratch. How to buy stocks for beginners need not be a total stab in the dark if you follow some of the lessons I outline on this site. It should at least help you navigate your way through the minefield that is the stock market.

Like everything in life, the stock market can be a bit of a gamble but as long as you do your research and keep your head if the price dips you'll be fine! Stock market trading for beginners can be a straight forward process if you follow the guidelines!