Looking Into The Stock Market For Beginners

Are you a stock market beginner? The amount of "civilians" that have become involved

in the stock market has increased markedly over the past few decades. So you may be asking yourself "how can I get a cut of the deal and make money investing?" There are many varying approaches to finding businesses that may be worthwhile to invest in, but two basic methods are fundamental analysis or technical analysis. Fundamental analysis involves analyzing companies by their financial statements found in SEC Filings, general economic conditions, business trends and the like.

Technical analysis looks at price actions in markets by utilizing charts and quantitative techniques to try to predict price trends that may be independent of the company's financial prospects. One good example of a technical analysis strategy is the Trend following method. This analysis is used by Ed Seykota and John W. Henry and it looks at price patterns, uses strict money management, and is founded also in diversification and risk control.

A different approach many people like to take to make money investing is to invest through the index method. With the index method, you hold a weighted or unweighted portfolio that has the entire stock market or some segment of the stock market. When you use the index method your goal is to maximize diversification, cut back on taxes from too frequent trading, and ride the general trend of the stock market, which in the United States has averaged almost ten percent a year, since World War Two.

A useful thought to remember if you are a beginner trying to get into the stock market is that, according to a lot of national or state laws, a large number of fiscal obligations are taxed for capital gains. Taxes will be added on by the state over the transactions, dividends, and money you made on the stock market, in particular, in the stock exchanges.

But, these fiscal obligations may change from area to area because, along with other reasons, you can assume that taxes are already included into the stock price through the different taxes businesses pay to the state, or even that stock market operations without taxes are helpful to help foster economic growth. My best words of advice to you are the old clich "never invest more than you can afford to lose," and good luck in your prospects.

by: Mallory Megan

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