Monday, December 7, 2009

How To Start Investing In The Stock Market Without A Broker

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Because of the stock market decline in 2008, many people are starting to wonder how to start investing in the stock market without a broker. I think that this is a great epiphany, because for the first time, people are starting to realize that your broker is really not working in your best interest. If they were, don't you think they would have called you and told you to sell at some point. If they didn't then it's time you start learning stock market investing on your own. I've been telling everyone I know that you and I are just as qualified to lose half our money. Why do we need professional advice to tell us how to do it. You would be better off investing in a stock index fund and leaving it alone if you are going to follow the market down.

What you need when you are learning how to invest money in the stock market is someone that will tell you when to lock in gains. And if they are not going to do it, then what are we paying them for? OK. So the answer is that they aren't earning their money, right. Are you perfectly capable of losing half of your money. I know I am. Heck, I can lose all my money if I put my mind to it and you can too.

If you want to invest in the stock market on your own without a broker, the first thing you must do is pick an investment strategy that you are going to follow. You've got to decide are you going to be a growth investor or a value investor. Are you going to invest in mutual funds or individual stocks? Once you pick a strategy, you must be determined to become an expert at it. You also must stick to your strategy and not flip flop and invest in penny stocks one day and options the next.

After you pick a strategy and are starting to learn how to start investing in the stock market, you might want to start paper trading or use some trading simulators available online to start learning the mechanics of how to place orders. I know that the broker I work with provides a stock market simulator with my account which is super. (FYI: I use optionsxpress)

As far as what online broker to use, if you go with one of the big names, you are probably going to be OK. Some have different trading tools than others but for the most part, you'll be able to place orders once you fund your account as good as any other. I'd mainly be concerned with fees, especially if you account has a smaller balance. Try and get with a broker that doesn't have any monthly maintenance fees that might erode your account.

Investing in the stock market for beginners can be a daunting task. But with patience and perseverance, you can learn what you need to know to do it without a broker and be succesful at it. The only thing that is stopping you is yourself.

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