So the important things in your life are finally going gang-busters and you’re finally making some headway in your career. You’re married or have a significant other who loves you dearly. Student loans are now manageable. Your home is comfortable, if maybe not as large as you would like. You plan to tackle this later. By all accounts, you’re considered successful by your friends. And because this is true, you’ve begun to think about dabbling in the stock market. Smart move.

Guess what? It’s not as difficult as others would have you believe. Here’s why.

1. A) Stocks are simply pieces of paper that represent companies you’ve heard about all your life. Seriously. You get up every morning and have your breakfast. Guess what, that bowl of cereal you’re eating is a thriving company that issues stock. Ditto for those pancakes, grits, orange juice.

If you’re a young man who has always fancied sports, with just a few taps on your favorite mobile device you could pull up salient information on your favorite team’s company stock, allowing you to make an intelligent choice, which would be a better choice that would beat the average investor. But since you’re a sports fan, you already know little nuggets of information that would give you a competitive edge over others. This is essentially investing.

1. B) To locate breaking stock market news on your favorite stock, go to your favorite market website and enter your stocks three-letter or four-letter ticker symbol. If you don’t know its symbol, you could just type in the company name and the software will locate the company’s website. Okay, so you’re looking at the stock page of your target company. You now want to gather information about said stock — in order to make an intelligent investment, right?

Here’s what you do:

• Enter the stocks ticker symbol
• Somewhere on the page, you will see the S & P 500 (list of largest companies — bellwethers to help you gage if it’s a bull or bear market)
• Check the stocks 30-day moving average (the opening/closing prices for the last thirty days)
• Look at the bottom of the chart to check the volume of shares being traded (to determine if the big banks and brokerage firms are trading. If so, jump in

Why? Because the large banks and brokerage firms are considered the smart money in the market. These firms typically trade large blocks of shares for people like Michael Douglas, Oprah Winfrey, Donald Trump, etc. In three words: they move markets! When I say jump in, I’m talking about paper trading the stock for a few weeks — to gauge its personality.

Many first-time investors think stock investing is gambling. It is if you don’t know what you’re doing, which is the case for those who just blindly jump in into the market with no real knowledge of how their stocks will behave in an up or down market. The market actually loves these types. Don’t let that be you. You want to invest intelligently, because this is what has moved you to the front so far.

You’ve largely been successful up to now by doing things that come natural to you. With stock investing, you want to take this approach. For example, you have a young child or pet. You love them dearly and could spend hours just sitting and watching them. Over the short time they’ve been with you, you’ve developed a sixth-sense knowing how they feel: good, bad, indifferent, whatever. In other words, you’ve learned about their personality.

This is key in stock investing. Use this technique when tracking (paper trading) your stocks for a few weeks — to learn your “pet” stocks personality. In two to three weeks, you’ll know when it’s time to pull the trigger and go live. And you’re going to fall in love with it the first time. Long story short: play to your strengths. Invest in what you know.

Categories: Stock Market