how do i go about purchasing shares of stock

MNSL answered 10 months ago …

I think it is better to learn stock market thoroughly if you have never purchase a stock and new comer to stock market. This is not a time to enter stock market if you are new to the market. Some new investors who entered stock market at the wrong time lost their entire holding. Now we see market fluctuations almost everyday. Those days we were able to see market direction as there was less fluctuations. Please remember stock market, commodity market and real estate markets don’t go up continuously. Through out the history, we have seen bubble, crash, correction etc in the stock market etc. Examples are: 1987 crash, recent housing crash, and recent market corrections through out the word etc. Experienced and intelligent investors know how to minimize their risk and how to pick outstanding stocks during events like above.

I think If you a new to the market it is better to learn as mush as you can now. There are plenty of websites and plenty of books. Fidelity is a good place to start because their record is good and they will give you good return. Don’t depend on research reports, advisors alone. If you like to invest in a company Pl look for fundamentals, consistent earnings in the future, higher demand for their products and services, less competition, with outstanding management and strong balance sheet. Try to understand ratios like P/E ratio, earning per share, return on equity etc at the beginning. You can compare companies. I think new investor should enter the market when P/E ratio is low. Then he can avoid paying higher price for stock. Greater the earning per share it is good. If you see stock with higher return on equity (more than 20%) Pl keep it under your radar.

If you don’t have lot money make sure you are not over paying for any stock. Present bull market started 05 years before and most stocks are now overpriced. However still there are stocks, opportunities all over the world. There are some stocks and commodities will do very well in 2008 and 2009. We are in final stage of this great bull market.

Followings are good books to read:
The Intelligent Investor: A Book of Practical Counsel by Benjamin Graham

Common Stocks and Uncommon Profits and Other Writings 3 by Philip A. Fisher

One Up On Wall Street : by Peter Lynch

Beating Street by Peter Lynch