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How to Learn Stocks - 3 Tips for the Next Generation Investor
Submitted By: SB Wise Date: July 01, 2011, 06:58:02 AM Views: 2831
Summary: I wanted to know how to learn stocks at a very early age. Money was tight for me as a kid and it became apparent to me early on that figuring out how to learn stocks and invest in them wisely could make a difference in my life. It is all of about thirty years later

I wanted to know how to learn stocks at a very early age. Money was tight for me as a kid and it became apparent to me early on that figuring out how to learn stocks and invest in them wisely could make a difference in my life. It is all of about thirty years later and I feel like I have something to offer to a new generation (or newly interested generation) of people interested in wanting to know how to learn stocks and trade them. Here are three tips that should help you get going.

Tip #1: Learning How to Trade Is Not Expensive
I can't sit here and say that going to an expensive school and paying a lot of money to learn about finance was a bad choice, but it definitely is not necessary to have a Stanford or Harvard education to trade in the stock market. A far wiser (and less expensive) alternative is to get your hands dirty and make a few trades in a low cost trading environment such as binary options (click link for a free tutorial). Binary options can be traded with as little as $200, have no transaction costs, and still pay out enough of a profit to make it worth your while. Try spending $200 on a Stanford finance education... you won't even be able to afford your first textbook!

Tip #2: Beware of Financial Advice from Your Cab Driver
I can not emphasize it enough: most stock tips are bogus. Even if you're sitting on the 31st floor with the Salomen Brothers traders in their hey-day, if you hear a tip odds are it's either bogus - or if it's actually a winner - illegal. Best not to listen to the advice of your grandmother, your cabbie, or your golf buddy. Do your own thinking and make efforts to do your own investigation. Some of the best stock market advice for beginners I can think of is to not listen when you hear a "can't miss" tip.

Tip #3: What Works for Warren Buffett Is Not Likely Going to Work for You
People mention the name Warren Buffett and act like he has some sort of aura about him and his investments. He has had a tremendous track record over the years that is hard to argue with but consider this: you and Warren Buffett do not have the same ability to control the outcome of investments. Buffett only invests in companies in which he either has better information about, or he has the ability to brow-beat managers into improving performance. You don't have that ability. Buffett is an active manager, you are a passive investor. Ergo: you should not invest the same way (buy and hold) that Warren Buffett does. It is my belief that people like us (minnows) ought to invest the way minnows live their lives: darting in and out of the market snatching whatever bits of food we can. In other words learn the ways of using short term high yield investments.

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