10 Strange Facts About Stock Market Picks

Stock investing or making a stock investment does not require experience in the stock market. You don't need to pick stocks on your own or take on excessive risk to invest in stocks. Here is a basic starter guide to stock investing for novices.

What you'll need to understand about the stock-market when you make your first stock investment is that stock prices fluctuate. Stocks trade on exchanges, and historically when held for the long term stocks have produced returns of around 10% annually. Over the shorter-term the market goes through cycles called bull markets (rising prices) and bear markets (falling prices).

Most of the time bull markets prevail and most investors earn money. In bears markets a large proportion of investors lose money, since many stocks fall in value.

Investing for a beginner should not be about trying to pick stocks which will outperform the stock exchange in general. Stock investing, especially investing for a beginner, should be about making a stock news releases investment without speculating and accepting heavy risk.

The simplest way to invest in stocks without speculating is to invest in investment funds: exchange traded funds (ETFs), and mutual funds. In both cases you make a stock investment by buying shares. You then own a small part of a big portfolio of stocks which is managed for you and all the other investors who own shares.

To invest in stocks through an ETF you will need a brokerage account. Stock mutual funds may be purchased in a variety of ways: through an investment professional, in a 401k-type plan, in a brokerage account, or by dealing directly with a no-load fund company.

Unless you have an investment adviser you will need to pick your own funds to invest in. As a general guide to investing for novices, I suggest you start investing with a major stock index fund.

As an example, stock symbol SPY is an ETF that tracks a major stock index, the S&P 500 Index. Various mutual fund companies offer S&P 500 Index funds also. In either case, they're a stock investment that tracks the performance of 500 of the largest stocks (large cap stocks) in America.

In good times in bull markets, you'll make money. In bad times and bear markets such as in 2008, expect to lose money along with just about everyone else who decided to invest in stocks.

The great news about investing in a stock index fund that tracks the stock exchange: quite often stocks go up in value. Plus, unlike individuals that pick stocks to beat the market, you don't need to sweat the possibility that you chose poorly ... resulting in larger than average losses.

Now that you know where to invest in stocks to participate within the currency markets without undue risk, you certainly will want to find out about investment strategy. As soon as you learn how to avoid major losses in bear markets, you are way in front of most investors.