| There are several important things you should | | | | Tips of investing in the Stock Market: |
| consider before you begin investing in the stock | | | | 1.Select a Broker: |
| market: | | | | Once you are ready to start investing in the |
| First off, pay off any credit card balances and | | | | stock market, you will need to set up an account |
| other short term loans before even considering | | | | with a stock broker. There are full service |
| an investment in the stock market. Also, get in | | | | brokers and discount brokers. One attractive |
| the habit of paying off your entire credit card | | | | alternative is to have an auto-trade broker who |
| balances every month. Paying credit card | | | | will place the trades on your behalf.a. Full Service |
| companies large interest on your balances is a | | | | Brokers |
| sure way to prevent you from building long term | | | | Full service brokers will make recommendations |
| wealth. | | | | on what to buy. However, the individual brokers |
| Second, maximize your contributions to your | | | | are limited to what they can recommend based |
| company sponsored 401K or 403B plan as well as | | | | largely on the firm's research recommendations. |
| your individual IRA. You will maximize your long | | | | They are unable to sell you a no-load mutual fund. |
| term wealth by investing in tax deferred plans as | | | | They sell only loaded funds that carry a large |
| opposed to taxable accounts. Some companies | | | | front end commission or large commission when |
| even match a portion of their employees' | | | | you sell. You can develop an on-going relationship |
| investments. Your money will compound tax free | | | | with a full service broker since you will be placing |
| until you have to begin taking mandatory | | | | all of your trades that broker. The commissions |
| distributions which start at age 70 ½ under | | | | at full service brokerage firms are significantly |
| the current tax code. Compounding your money | | | | higher than those at a discount broker. Full service |
| tax tree is the best way to invest in the stock | | | | brokers include: Smith Barney, Merrill Lynch, and |
| market. | | | | A.G. Edwards.b.Discount Brokers |
| Decide your stock market investing time horizon: | | | | With a discount broker you make your own buy |
| Now you need to consider your stock market | | | | and sell decisions. You will be free to buy no-load |
| investing time horizon and what kind of trader | | | | mutual funds, individual stocks, and exchange |
| you'd like to be. Consider the following: | | | | traded funds. The commissions will be significantly |
| 1.Scalpers: This group tries to "scalp" small profits | | | | lower than the commissions at a full service |
| by buying or selling frequently throughout of the | | | | broker. While you can place your trades by |
| day. | | | | telephone, you will find it much more convenient |
| 2.Day Traders: Similar to scalpers, this group | | | | to place your trades on the discount broker's |
| might buy and sell the same stock as many as 50 | | | | trading platform. These trading platforms are user |
| times in one day. They try to exploit the volatility | | | | friendly and facilitate the trading process. You can |
| in the market. | | | | download the necessary forms to open an |
| 3.Swing Traders: These traders buy and hold their | | | | account and wire transfer your money to your |
| positions for several weeks or several months | | | | new account. Unless you feel you need "hand |
| before selling. | | | | holding" and are willing to pay higher commissions, |
| 4.Long Term Traders: This group buys and holds | | | | I recommend you consider trading with a discount |
| their investments for many years. | | | | broker. Discount brokers include: T.D. Ameritrade, |
| For beginners, it would not be wise to try to | | | | Charles Schwab, and Scottrade.c.Auto-Trade |
| invest in the stock market by scalping or day | | | | Broker |
| trading. My Rebound Trading Systems are "swing | | | | If are unable or not interested in placing your own |
| trading" systems which enable the investor to | | | | trades, an Auto-Trade Broker is a good |
| invest in the best performing segments of the | | | | alternative. Your commission charges will be a bit |
| stock market and then continually upgrade their | | | | higher that with a discount broker but you will not |
| holdings as market conditions change. | | | | have to check your email each evening and place |
| Look at all your investment options: | | | | your own trades. The Auto-Trade Broker gets |
| Everyone should have some money allocated to | | | | the trading signals at the same time as the |
| the fixed income market such as Corporate | | | | subscriber and places the trades on the behalf of |
| Bonds, U.S. Treasury Bonds or Notes, or CD | | | | the subscriber. You can always see the value of |
| (Certificates of Deposit). If you are in a high tax | | | | your portfolio as well as the individual holdings on |
| bracket, Municipal Bonds are a good alternative | | | | the Auto-Trader's trading platform. For those who |
| because the interest paid is not subject to federal | | | | never want to miss a trade and not have to |
| income tax. Depending on your age, the | | | | worry about placing the individual trades, an |
| percentage of your total investments allocated to | | | | auto-trade broker is a good alternative. |
| fixed income should range between 20 and 40%. | | | | 2.Know the Minimum Account Size Requirement |
| Investors can invest in a mutual fund directly with | | | | You can purchase an Exchange Trade Fund or |
| the Mutual Fund Family. However, it is far better | | | | no-load mutual fund with as little as $1,000 to |
| to purchase mutual funds from a discount | | | | $2,500. However this would not give you much |
| brokerage firm that handles many different | | | | diversification. I recommend a minimum |
| families of mutual funds. (T.D. Ameritrade, Charles | | | | investment of $5,000 in each investment. That |
| Schwab, and Scottrade, are three good | | | | would equate to a minimum portfolio sized of |
| alternatives.) This enables the investor to trade or | | | | $25,000 to $35,000 depending on which system |
| upgrade their mutual fund holdings between | | | | you decide to trade. These systems could be |
| various mutual fund families by placing the order | | | | traded with half that amount but the commission |
| with their discount broker. Mutual Fund or ETF | | | | charges as a percent to the total portfolio value |
| Trading can be done online with a very user | | | | will naturally be higher. |
| friendly trading platform. | | | | 3. |