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Are you scared away from reading this article? Don’t be. Everyone (18 and over mind you ) can invest in the stock market, regardless of job, education and location… and its easy! Whether you are a work at home mom, a blogger, entrepreneur, student or what have you, investing in the stock market is as simple as finding a product you use and predicting the company will turn out something newer and better.

I am 18 years old and I hold $1,500 worth of stocks in a brokerage account. I’m sure you are considering all of the bad economic news that is out, and really the height of the crash came in early January. I started my trading account on January 1st, and I have positive gains thus far. If you haven’t put serious thought into buying stocks, now is the time.

Here are five clear-cut reasons you shouldn’t be scared to invest in stocks:

1. The “Big Dogs” Don’t Want You To Its a fact. Plain and simple, the big market players (mutual funds, investment banks, stock advisers, etc.) don’t want you messing around in their rich-man’s game because it is a market that they used to control. Slowly, but steadily, more and more people are owning stocks… and for good reasons! The stock market is the best way to make money ever created, and it is totally open to the public. If you think you are too inexperienced to own stocks, think again! One thing that really benefits small investors is that they don’t move the market. When you trade, nobody is going to see that impact… so you can basically sneak in and out of companies taking profits off the table left and right.

I want to see the age when everyone plays the stock market. I think that it is coming sooner than we expect. Not only is it a fun, gambling experience, owning stock will educate you in the ways businesses work! If an 18 year old student can figure this game out, you can too!

2. The Stock Market Typically Goes Up Don’t always believe the recession-doomsday hype. It is a fact, in fact, that throughout the history of the stock market, the average recession has seen S&P Index returns of +3.14% during the actual recession, and of +28.20% three years forward from the first warning signs of recession. The stock market has the ability to weather a storm, and it seems like the most brutal hit has already been served up…although we could fall a bit further. The point of the matter is that as long as you are investing in the right areas, you should be recession-proofed enough to make money regardless of the macroeconomic conditions at play.

3. It’s Cheap and Affordable to Invest Now!

Over the past decade, tons of discount brokers have been cutting their rates to encourage you to use their services and invest. Equity trading has gotten faster, cheaper and easier than ever in the 21st century! There are services like Zecco.com that offer $0 commission fees, and more reputable and established brokers that charge a meager $7.99/trade. When considering you are probably going to be buying stocks that cost a total of $250-1000 per purchase, the commission fees are a blip on the radar.

These discount brokers (or premium if you are interested) offer fast, reliable services that basically do it all for you. I am with Scottrade currently, and they have programs they give you for free to research stocks, see what experts are saying, and they even track all of your taxable gains for you. It is easier than ever to sign up for an account and deposit as little as $500 to get on your way! Check out my “getting started” post for more information.

4. Potential Upside Outweighs Downside Risk

A lot of my friends at Penn State are hesitant to get into the stock market game. They claim they are “just not ready” or “too scared to make a first move”… I call this a load of garbage. Investing is not about letting it all ride on lucky seven. When you buy a stock, you own a piece of that company, if the stock price goes down, it goes down… but you shouldn’t be losing any more than 20% of your initial investment at any rate. Your money is generally safe in stocks, so stop worrying and focus on the upside!

At this point, I want to bring up my portfolio’s performance in 2008. At first, I was off to a horrendous start with everything trading down on poor news. As of late, everything has just about balanced out and I am actually sitting on a gain! I have stocks like Yamana Gold I have profited more than 26% on in a month, and stocks like NVidia where I am down 15.5%. The point is, you have your winners and your losers. Take the bad with the good and you have a favorable amount of upside compared to downside. If you play your cards right, you will see more money than surfing the internet could ever bring you.

5. It’s Easy and People Want to Help You

I’ve mentioned just how easy it is to get started in the stock market. Stock brokers like TD Ameritrade, Scottrade and Charles Schwaub are practically throwing themselves at your feet. People want to help you nowadays, and it is so easy to get started you won’t believe your eyes. If you don’t know where to invest, turn on CNBC for an hour. Seriously. Jim Cramer? Fast Money? These programs are chock-full of investment ideas that are well researched. It simply becomes your job to look into these stocks a bit more to make sure they are right for you.

The internet can be your best investment friend. I suggest the Motley Fool for reading up on terrific stock opportunities. There are even bloggers looking to help you like the Intelligent Speculator and some guy named the Net Fool.

The Bottom Line: There is NO better way to get high returns on your investment than with the stock market. Whether it is high-growth risky plays you are gunning for, or established conglomerate powerhouses… almost any sound trading should make you money. Consider an initial $100 deposit gaining just 10% (you can do better ) for five years… BAM! That’s about $1,650. What if you added $100 every year to that one grand deposit? SHAZAM! That’s a whopping $2,300. The magic is in the fact that when your stock value increases, you basically own more of that company, nominally speaking. Instead of making money on your $1000, you are making money on your $2,300! The possibilities are endless, and it is easier than ever to get in on the action. -The Net Fool

The question about what moves the tock market is quite complicated. There are several visible and invisible factors that cause the rise and fall in stock market. There are several issues on political, economic and social level that include inflation, change in interest rates, earnings of the people, oil and energy prices, war, peace and terrorism, political and domestic situation and so on. While some of these factors may have long-term consequences for the stock market, others may have only short-term implications.

What, however, drives the market crazy is the uncertainty factor. What the stock market is most sensitive to is the surprises. When something unusual occurs in the country, the stock market immediately reacts to it. Stock market radars are extremely sensitive to changes.

This can be illustrated by an example. If the Federal Reserve Board’s Open Market Committee-Fed- thinks of raising the interest rates by one quarter percent, the stock market will not react much. If contrary to the expectation, the Fed raises the interest rate by one-half percent, the market will feel shocked.

So any news which can surprise the market can rattle it, be it on the economic front, terrorist attack and similar other incident. If the news is really good, it also shows its impact in form of rise in stock prices.

The cumulative effect of these factors, whether good or bad, creates market phases such as bulls phase, bears’ phase or secular phase.

A bull market is also referred to as a bull run. A bull market is characterized by a rise in stock prices. It keeps most investors happy. It creates and strengthens their confidence and makes them optimistic about the returns on their investments. Therefore they tend to invest in stocks in the hope of making big in the near future.

A notable example of bull market was in the 1990s when the US and several international markets had a very happy time because the financial markets went up very rapidly. The US stock markets had a bull run from 1983 to 2007 except for brief periods of slumps.

Bear market is associated with fall in prices and lots of pessimism. Investors fear losses. A negative sentiment prevails in the market and investors want to sell their stocks fearing further downfall.

The most glaring example of bear phase in the history of United States was after the Wall Street Crash of 1929 that continued from 1930 to 1932 generating what was called the Great Depression. A milder version of bear market occurred from about 1973 to 1982 when the economy became stagnant. It resulted in energy crisis and high unemployment in the early 1980s.

A bear market is often characterized by the constant price fluctuations. A bear market does not mean just a simple fall in stock prices. It may result in substantial price fall. Although you cannot give a clear definition of bear market, it is often characterized by a fall in price by around 20% in a period of two months. A recent example of bear market is current state stock markets of world in the year 2008.

A bear market should not be confused with a period of correction. Correction also results in fall in stock markets, but a period of correction is usually short lived. Moreover correction usually occurs during the bull phase. The price fall does not surpass 15-20%. The bear markets last longer and suffer much greater price falls from top to bottom.

A period of correction in stock prices is usually a welcome opportunity for smart stock market investors. They try to buy high value stocks when most people try to sell them away at reduced prices. The profit from their sales as soon as the correction period, which is usually short lived, is over.

When the stock market price shows downward trend, the analysts begin to debate whether it is actually a correction, a rally, or the start of a bear market or even a bull market. In any case it is usually impossible to arrive at any correct decision. In fact, whether the market is actually passing through a correction or a truly bear phase can be determined only after that phase is over.

It must, however, be noted that a bear market howsoever depressing it may be, rarely wipes out the real (inflation adjusted) gains made during the previous bull market. On the other hand the bulls that succeed the bears often make up for the real losses of any bear market.

Most people want to take steps early on to ensure that their personal finance status will be secure when they retire, however few really understand what it takes to create a stock market portfolio that will be able to meet their financial needs when they retire. To create the best portfolio possible it is important that you educate yourself on how the economy impacts stocks, how to research a stock, and how to buy a stock.

The first step in making the stock market work for you is to understand how the economy impacts the performance of a stock. One thing that usually impacts the stock market is the federal interest rate. When federal interest rates go up spending tends to go down. On the other hand, if the federal prime rates go down spending tends to go up. By identifying items that impact the health and performance of the stock market, like interest rates, and by knowing how they will impact stock performance, you will be better able to judge when it is a good idea to sell a stock, and when it is a good idea to buy a stock.

The next step in making the stock market work for you is to learn how to research a stock. There are a lot of free research tools that you can use to learn about stocks. For example you can get stock quotes from a number of financial websites, as well as company information, financial reports, and stock reviews. Another way that you can learn about the stock market is to talk with a professional financial planner or stock broker. They will be able to provide you with information about the stock market and information about how to invest your money wisely.

The last step in making the stock market work for you is to learn how to buy and sell stocks. To make a stock investment you will need to first find a stock that you are interested in, set up an investment account with a stock broker or with an online stock broker, fund your account, and enter your stock order. When you are ready to sell a stock you either tell your stock broker to sell or you enter your sell request through your account with an online stock broker site.

Proponents of market efficiency divide risk into unsystematic and systematic. Unsystematic risk is not priced by everyone investing in the stock market. Here is an example to help you understand unsystematic risk. If you are considering investing in the stock market you could either buy specific stock in a specific company that you think will have a rise in price in the future. On the other hand if you don’t trust your stock ability you have the alternative of buying a basket of stocks that mimics the stock markets total combined movement. One way would to be to buy an indexed mutual fund like VFINX which is pegged to the S&P 500 which is a very large stock market index. The degree to which the stock moves relative to the general market is the unsystematic risk of the stock.

Systematic risk is the degree to which the stock changes in price relative to the general stock market as measured by an index like the S&P 500. Model calls this measure a stocks “beta.” The Fama-French Three Factor Model is a regression analysis that tries to separate out the systematic risk of a stock from the unsystematic risk by compensating for three factors. The first factor is a financial ratio called book to market. The second factor is the size of the firm as measured by its market capitalization. The third factor is the return on the market portfolio.

The book to market ratio is nothing more than what accountants estimate the company to by worth divided by the market capitalization of the company. The market capitalization of the company is the share price of the stock times the total number of shares the company has outstanding in the stock market. The return on the market portfolio is measured by some index like the S&P 500.

According to the efficient market school (which I do not agree with), size and book to market reflect systematic risk, meaning risk that requires compensation in the form of higher expected returns. If this is the case researchers should see that investors perceive small-value stocks to be riskier than large-growth stocks. The do see this which does lend some support to market efficiency. But investors consistently expect large-value stocks to outperform small-growth stocks and this is perverse. Basically, investors recognize that small upcoming companies are riskier but do not expect to be compensated for this risk as the efficient market model says that they should.

In a similar fashion, analysts tend to recommend growth stocks more favorably than they do value stocks. In the efficient market model of which the capital asset model (CAPM) is a part of, the profit from stock investing that investors expect should be as much as the risk they perceive that they are taking instead of the exact opposite which we find to be the case when actual research is performed on the matter.

This result caused the death of CAPM beta that was treasured by efficient market theorists despite the fact that the model resulted in the awarding of a Nobel Prize in economics to William Sharpe of Stanford University. Hirsh Shefrin has suggested that a behavioral beta be introduced into the model that might help explain these results that are contrary to market efficiency.

Every day there are a dozen new HOT stock market tips that guarantee your financial success. Every day there are hundreds if not thousands of people that jump on the bandwagon, and every day, each of those people are disappointed.

When it comes to popular stock market tips, there is no golden ticket to striking it rich. So I’m going to show you how to make your own HOT guidelines that will ensure you stay on the right course-the one that leads to success.

Stock Market Tip #1: Play Your Game

Develop a set of rules that you can follow. Whether they include some of the tips in this article or are strategies you’ve always lived by, STICK WITH THEM. An inconsistent, but more importantly an undisciplined trader will never make a profit. Chasing stock market tips won’t make you money. Your rules are your money. Again, there will always be hot stock market tips that ensure success, but if you continue to whole-heartedly practice your own tips, you’ll see profits in no time.

Stock Market Tip #2: Control Your Risk

There are many adventurous traders out there…and those are the ones that loose their fortunes. If you always look out to protect your capital base you’ll ensure your financial safety. Now one of the most important stock market tips I can give you is to continue to let that capital base grow. That way, even if all of your investments fail, you won’t be jeopardizing your previous profits. As a general stock market tip, never risk more than 3% of your portfolio on any one trade.

Stock Market Tip #3: The High Road in Cutting Your Losses

Things happen. People lose money…LOT’S of money. So don’t be one of them. Basically this stock market tip means don’t be stupid. If one of your investments turns sour don’t stick around hoping it will right itself. Have a set target loss percentage where you can cut and run. Again, it’s about being disciplined, remember? Set it no higher than 15% of your opt in, and you’ll have a save exit with every trade.

Stock Market Tip #4: The Sky’s the Limit

In contrast to Stock Market Tip #3, if a stock is rising beyond belief, don’t jump out in fear of it suddenly falling back to reality. Instead, ride it out as long as humanly possible. This is how the biggest and most talked about gains are made-this is how FORTUNES are made. This stock market tip will ensure that you give yourself the best chance possible of striking that gold mine. Now if the stock does in fact start to fall, go ahead and opt out. It’ll be worth more to you to risk that little loss in the end for that huge gain you’ll make.

Stock Market Tip #5: Back to School

You know the saying, “Learn one new thing every day?” Do it. Seriously. Our stock market is ever-changing, diversifying, and adjusting, and YOU need to do your homework. It takes a lot to stay on top of it all. So if you come across something that you’re not familiar with just look it up. If you think you know it all…go LOOK for something. One of the easiest ways to accomplish this stock market tip is to know all of the trading vocabulary. That’s also the easiest way to ensure you’re prepared to take on any obstacle that comes your way.

Stock Market Tip #6: How to Bring Your “A” Game

Stock market trading isn’t only about successful financial advancements. Well actually it is, but you’re not going to be able to do that every day if you don’t have the emotional strength to pull it off. This stuff is supposed to be fun. If you’re not at your best psychologically, you’re not going to be focused, you’ll make poor judgments, and most importantly you won’t make money. Just think about the meaning of this stock market tip. If you’re enjoying yourself, it’s no longer work, so you are free to “work” in a mentality that will, in fact, play to your strengths…and wallet.

Stock Market Tip #7: Staying Above the Curve

You don’t have to make a fortune with every trade you make. You don’t have to become a millionaire at the end of every trading day. Here’s stock market tip #7: You won’t. The people that shoot for that glory every day are the ones that are losing fortunes, not making them. What you need to do is play above the curve. Don’t be average, but don’t be extraordinary. Extraordinary has WAY too many risks to worry about. Fortunes are made gradually. It takes discipline and consistency…something the “average” trader lacks.

Finding the best Forex trading system for oneself can be quite a tedious task especially if one does not know how to go about it. Nevertheless, however difficult it may be, it is not impossible either. All one requires is a lot of patience and time – then sooner or later he is sure to come across the right system.

One can start the search for the right trading system from the Internet. Once you start reading about Forex you’ll come across numerous trading systems all claiming to be the best Forex trading systems. If you are a beginner in Forex trading training then probably the Forex forum would not be the perfect way to make a head start.

Now you may ask – if not the Internet, then what? Well! There are other ways too that can help you locate a good Forex trading system. Let us see one more method through which you might be able to find a great system.

Price – A Good Way To Locate A Trading System?

Traders have always used the price to trade anything in the stock market. So unless you understand the importance of price and go through its minute details your understanding of the best Forex system is not complete. Only after you understand the movement and the action of the price can you become a successful trader. Even the best and the most expensive trading system are of no use if you do not understand the importance of price. So locate a simple price chart to help you be a successful Forex trader.

Once you have understood the importance of price for trading Forex, you can go ahead and pick a trading system from the various ones available on the Forex websites. Forex education is at an all time high today and there are many online Forex trading platforms that provide demo accounts and tutorials for a beginner to practice on. Once you have grasped the fundamental requirements of Forex trading you can simply make the transition from using demo accounts to using real money.

Try and pick a Forex trading course that is simple for you to understand and provides a step by step learning approach. Also remember to tighten your grip on the tricks of the trade before you jump into read trading. Develop some strong strategies to help you develop a more logical and practical approach to Forex trading.

Things To Remember While Picking A Trading System

You would require a Forex trading system only when you finally start trading on your own. A trading system is a mechanical system that would help you keep a track of the market and assist you by setting off its indicators when profit is seen. Look for the following elements in the system to ensure that you are picking the best Forex trading system for yourself:

• The profitability record
• Ease of use
• User friendliness
• Support system and guarantee
• Cost vs. Benefit ratio

If you are able to locate a trading system that incorporates all of the above, you can be sure that you have picked up the best Forex trading system for yourself.