How to Invest smartly in Stocks

I've noticed that many of my readers were searching for this basic question of how to buy stocks, so I thought it might be useful to you to synthesize some of the major content that has generated in recent years, putting in one easy to find and easy to use location for your convenience. This product is not designed to be autonomous. Instead, each of the important concepts have been shown live with a link to a fuller, richer of resources or article detailing the specifics of that issue.

How to Invest in Stock - The four major forms of Invest There are typically four main ways to invest:

1. Through a 401k plan or, if you work for a non-profit organization, a plan 403b
2. Through a Traditional IRA, Roth IRA, or SEP-IRA account
3. Through a brokerage account
4. Through a direct stock purchase plan or dividend reinvestment plan (drip)

How to invest in stock - The six types of assets that could itself In general, there are six types of assets for the average investor is likely that in his own life:

1. Populations common - owned enterprises
2. Preferred Stock - special types of stocks that often pay high dividends but have limited upside
3. Bonds - corporate bonds, municipal bonds, savings bonds, the U.S. government Treasury, etc.
4. Money markets - highly liquid funds that are designed to protect their purchasing power; considered a cash equivalent
5. Real estate investment funds or REITs - a special kind of company that designation does not allow the imposition within the company provided more than 90% of income has been paid to shareholders. The assets are often invested in a variety of real estate projects and property.
6. Mutual funds including exchange of goodwill, index funds and actively managed funds.

How to Invest in Stock - Doing Research

When the investigation of an investment normally there are five documents that wants to get your hands on research on the relative merits of a potential values:

1. The 10K - this is the annual filing with the Securities and Exchange Commission (SEC)
2. The most recent 10Q - this is the quarterly filing with the SEC
3. Proxy data - including information on the Board of Directors and management pay and shareholder proposals
4. The most recent annual report - read the report of the Chairman, CEO, CFO and, sometimes, or other high-ranking officials to see how they see the company. Not all annual reports are created equal. In general, the best in the business is considered a letter by Warren Buffett of Berkshire Hathaway, which can be downloaded for free on its corporate website.
5. One statistic that shows which dates back five or ten years. Several companies prepare such information, especially for a subscription, a Morningstar, Value Line, S & P and Moody's.

How to invest in stock - the three financial statements

There are three financial statements you will want to examine closely:

1. The income statement
2. The balance sheet
3. The cash flow statement