How to Invest Money in the Stock Market
You don't need a degree in finance to learn how to invest your money. You need plain, clear explanations of the most important—and practical—concepts.
Even though finance and investing sometimes seems like maze of jargon and conflicting advice (ETFs! REITs! Index funds! Penny stocks! Inflation! Taxes!), you can learn how to invest money and build real wealth in the stock market on your own.
This is our How to Invest guide; a series of articles written in plain English for the average investor. You can start from the ground up and learn only what you need to know from creating an online brokerage account to making your first trade to picking great stocks you can hold for years.
You can also search our entire library of articles:
How to Invest Articles What is the Quick Ratio? Why this simple financial measurement can tell you whether you should skip buying a stock--and what it can't tell you. What is Market Capitalization? What is market capitalization? The size and popularity of a stock influences whether it's worth investing in right now. What is Dividend Yield? What is dividend yield? How the dividend-price ratio and quarterly payout of a stock helps you make good investments. How Does Portfolio Churning Affect Your Returns? What is portfolio churning? How is churning defined in finance? How turnover in your investment portfolio affects your returns. What is Portfolio Rebalancing? What is portfolio rebalancing? Should you rebalance your investments? Why and how often? Should You Sell Stocks in December? Should you sell your stocks in December? Why end of year portfolio rebalancing may or may not make sense--especially with capital gains taxes. Why Does The Media Cover the Stock Market So Poorly? Why does the media cover the stock market so poorly? Why are the stock market ups and downs always in the news? What Does the Efficient Market Hypothesis Mean for Value Investors? The efficient market hypothesis suggests that stock prices always make sense. Can value investors still find bargains in the market? What is a Cyclical Business? What is a cyclical business? When and why does it make sense to buy stock in a cyclical companies? What Makes a Risky Investment Risky? What makes a risky investment risky? Why make an investment if you know it has risk? Why high risk stocks may or may not make sense for your portfolio. What is an Economic Moat for a Stock? What is an economic moat? Why a durable competitive advantage can help your stocks make money! Is There a Secret Formula to Pick Good Stocks? Good stocks are hiding in the market, waiting for you. Is there a secret stock picking formula? How do you choose great investments? What is a Safe Investment? What is a safe investment? What makes an investment safe? How do you choose a level of safety for your portfolio? Why Do Companies Perform Stock Buybacks? What is a stock buyback? Why do public companies perform buybacks? When does this make sense? What does it do for investors? How to Double Your Money How to double your money by investing is simple. Find a good rate of return and wait. The math is easy to understand. What is a Good Annual Rate of Return? What is a good rate of return on investment? How much should your stocks grow every year? What's the best annual rate of return you can expect? When to Sell a Good Stock When should you sell a good stock? What to do when a stock doubles in value; how to profit from great investments and when to sell. When is the Right Time to Buy a Stock? When should you buy a stock? What's the right time to invest? That depends on its value. Always Choose Employer Matching 401k Contributions When should you elect to receive employer matching funds in your 401k? Always! Always take free money! Should You Invest in ETFs? What is an ETF? Is an ETF better than a mutual fund? Before you buy an exchange-traded fund, understand this! What Makes Good Stocks Good? What makes good stocks good? What great stocks are worth buying? They represent strong companies which know how to make money. When Should You Open a Roth IRA? When should you open a Roth IRA? What this post-tax investment does, why it matters, and why you should invest in your Roth IRA (or shouldn't). What is Dollar Cost Averaging? What is dollar cost averaging in stocks? How to buy low and sell high regularly, and when cost averaging investing does and doesn't work. Are Annuities Good Investments? What is an annuity? Does it make sense to invest in an annuity? What options for retirement planning make sense for you? What is a Small Cap Stock? What is a small cap stock? Should you invest in small caps? Why small businesses may offer great opportunities for individual investors. How to Invest $1000 How to invest $1000. Where should you invest your money for a safe and sound first foray into the stock market. What is Liquidity? What is liquidity? Why your ability to buy or sell a stock on any given day at any given price affects your investments--and the money you can make. Should You Invest in Insurance Stocks? Should you buy insurance stocks? Insurance is boring, but sometimes the most boring investments offer great opportunities to buy! What is a Tenbagger Stock? What is a tenbagger stock? How to find a stock which will double, quadruple, or multiply your gains ten times, thanks to super investor Peter Lynch. What is the Difference Between Trading Stocks and Investing? What is stock trading? What is investing? They may seem similar, but in practice they're very different. What you need to know. How Do Stock Brokers Make Money? How do stock brokers make money? What does a stock broker do? The answers could have implications for your investments! What is the Book Value of a Stock? What is the book value of a stock? Why book value matters when investing in a company. What is the myRA Retirement Savings Account? What is the myRA retirement account? How does the new myRA work? Should you invest in one? What Did Quantitative Easing Do to the Stock Market? What is quantitative easing? Why does the Federal Reserve buy bonds? What does QE do for the economy and the stock market? What is the Current Ratio and Why Does It Matter? What is the current ratio of a stock? What measuring short-term obligations means--and why it matters to investors. Are Online College Stocks Worth Buying? General education stocks--including for-profit education companies--have seen growth lately. Are online college stocks worth buying? Risks of Penny Stock Trading Why is penny stock trading risky? Here's why buying penny stocks and microcaps can lose you money! What is Free Cash Flow? What is free cash flow? How to measure a company's financial health by measuring profit, revenue, and actual money in the bank. What is Online Stock Trading? What is online stock trading? If you can do the research to pick stocks yourself--and you can--online trading may save you money and help you build wealth in the market. What is Discounted Cash Flow? What is discounted cash flow? A tool to help decide how much to pay for an investment based on your expected return. Discounted cash flow analysis explained. What is a Discount Stock Broker? What is a discount stock broker? Investing online as a self-directed investor with a discount brokerage can multiply your profits! What is the P/E Ratio? What is the P/E ratio? How to measure the value of a stock with stock price and yearly earnings. How to Buy Dividend Paying Stocks Stocks that pay dividends are a great way to get recurring money. How to buy dividend paying stocks--and how to find them. Should Value Investors Time the Market? What is market
timing? Some investors wait for the highest highs to buy and the lowest lows to sell. Why you can't predict market prices and why value investing works anyway. Why Do Companies Pay Dividends? Why do companies pay dividends? When does a company issue dividends, and what does quarterly income mean for your investments? How Do You Make Money with Penny Stocks? How to invest in penny stocks: three strategies to lose the least amount possible on some of the riskiest investments around. Why seeking penny stocks to buy is risky. Why Does the Dow Change the Stocks it Tracks? Why did the Dow Jones Industrial Average add Apple for AT&T? Why did it drop Hewlett-Packard, Alcoa, and Bank of America for Nike, Visa, and Goldman Sachs? What is the Stock Market? What is the stock market? An explanation of investing for novices and newcomers to the world of trading public stocks. Should You Buy Stocks Online? How to buy stocks online for beginners. How to get started buying stocks yourself--improve your investment return! What is a Hedge Fund? What is a hedge fund? What their managers do--and why the wealthy love and hate hedge fund investments. Buy the S&P Index Fund Serious investors know the value of an S&P index fund. Here's how to invest in the S&P 500 and how to buy index funds, through Vanguard or otherwise. What is the Share Price of a Stock? The share price of a stock is what you pay for a single piece of that company or its debt. Sometimes that price is wrong; you can make money from it! Is Buying Stocks Online Safe? Buying stocks online can be much cheaper than going through a traditional broker. Better yet, it can be safer! Understanding Investments Risk Your investments risk losses on the way to fabulous gains. How do you manage the risk of buying stocks to protect your money and build wealth? What is an Index Fund? What is an index fund? Why the simplest way to get good returns from the stock market is the best investment to start with! What is a Stock Dividend? What is a stock dividend? Learn how a dividend paid out in fractional shares is different from the cash dividend you're used to. Stock Market How To A stock market how to guide--investing and building wealth with stocks and value investing. What is Investment? What is investment? How does the stock market work? How to invest wisely, even if you have little money. Why Do Some Companies Not Pay Dividends? Why do some companies not pay dividends? They might have better uses for the money! What is a dividend? What they mean for stocks. The Current Price of Silver Today What is the price of silver per ounce? How to invest in silver and why silver is measured in troy ounces. What Do Stock Market Symbols Mean? What do stock symbols mean? They're shorthand ways to refer to shares of a company's stock. Some of them have interesting histories and meanings. Stocks and the Fiscal Cliff What happens to stocks if we fall off the fiscal cliff? What might happen in the market if the US defaults on its debt. Facebook Stock Price and Value What is Facebook's stock price? What does that represent and how should that affect the way you invest? Stock Brokers and Investment Brokers What do investment brokers do? What is a stock broker? What do these brokers offer regular investors? Should You Invest in the Highest Dividend Paying Stocks? Dividend paying stocks can be great to own, but chasing the best dividend stocks may cost you in the long run. Here's why! Should You Invest in Gold or Silver? Should you invest in gold or silver? Read this before you buy precious metal coins or bullion. Investing Book Reviews Investing books reviewed and recommended. Value investing explained; learn how to invest in the stock market with these great guides! Learn the Stock Market Learn how the stock market works, how to make money in the stock market, and how to find great investments. Investing Basics 101. The Best Stocks to Buy Now The best stocks to buy now aren't always flashy or hot. What's the secret great investors use to find good stocks to invest in now? Should You Buy Penny Stocks? Looking for penny stocks to buy? Micro-caps and pink sheet trading may look attractive, but can you get rich from day trading? Should you buy stocks like this? What Happened in the Stock Market Today? How did the stock market do today? Why is the market down today? Why is the market up today? What great investors already know. Benjamin Graham, Value Investor The Benjamin Graham value investing strategy is still one of the best ways to make money with stocks in the market today. How to Invest in Stocks Anyone can learn the tools of successful investing. How to invest in stocks, what to invest in, and how to build wealth in the market. How to Pick Good Stocks Learning how to pick good stocks is about patience and research. How do you know which stocks to choose? You do your homework—and use good tools. What Happens When Stocks Go on Sale? What happens when a stock price falls? What makes stock prices go up and down? When everyone starts to sell, smart investors look for bargains. Happily Ignoring IPOs Should you buy stock in an IPO? Didn't get an invitation to a big tech IPO? You're probably better off ignoring it. What is a Margin of Safety? What is a margin of safety? An easy way to reduce the risk of value investing! How to use safety margin calculations. What is Free Cash Flow Jitter? Free cash flow is vital to value investing. Free cash flow jitter measures trends over time to demonstrate the stability of a company. What is Dividend Reinvesting? What is dividend reinvesting? Should you reinvest dividends? What reinvestment means for your stock portfolio? What is Present Value? What is the present value of an investment? The right price to pay for a stock depends on how much you want to make from it. How to calculate present value and why it matters. What is Intrinsic Value? What is the intrinsic value of a stock? Every share represents a represents a portion of the value of a business. What's it worth and how to calculate it. Before You Buy Learn how to research a company before buying stocks. Consider the business behind it. Do you know its story? Can it grow per your expectations? What is Cash Yield? What is cash yield? How to analyze stocks with free cash flow yield and more reliable earnings figures. Comparing Debt to Assets for Stocks What is the debt to asset ratio? The relationship of a company's debt and liabilities to its assets is vital to its long term survival. Earnings Matter Most Only those companies that actually make money survive. Earnings are the most important financial measurement of an investment! Rethinking Loss Losing money on a stock hurts. Everyone wants to avoid bad investments, but maybe we think about paper losses the wrong way. What are The Dow, S&P 500, and NASDAQ Indexes? What is the Dow? What is the NASDAQ? What is the S&P 500? An overview of three influential stock market indexes. When (Not) to Pay Broker Fees Why are broker fees so high? Should you pay a broker to manage your investments? Usually not; stockbrokers may not have your best interests in mind. What is Value Investing? What is value investing? How looking for good companies with discounted stock prices can help you build wealth in the stock market. The Buy and Hold Philosophy
The buy and hold long term stock investing strategy is simple and effective. Why avoiding frequent transactions can save you real money.
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