| When you tell people that you're about to start | | | | yourself , then you're in for good news, because you |
| buying stocks, you're likely to encounter some latent | | | | don't need one! The type of broker that you need |
| hostility. | | | | isn't a human being at all - Ameritrade is a broker, for |
| Most people wish that they too were buying stocks, | | | | example. |
| but they're afraid to get started or ashamed that | | | | All you need to begin buying stocks is an account |
| they don't understand the markets. | | | | with an online broker. Don't listen to the naysayers or |
| Therefore, they try to discourage others from | | | | the Edward Jones commercials - you can do this on |
| purchasing stocks - it's the crabs in a bucket parable | | | | your own! |
| come to life. Often, these naysayers will dispense | | | | #3 - Buying Stocks is for Suckers |
| popular (but untrue) myths about buying stocks. In | | | | This is one of the pettiest, most inaccurate myths of |
| this article, those myths are dispelled, one-by-one. | | | | all, but in the wake of Enron and other Wall Street |
| #1 - Buying Stocks is Only for Rich People | | | | scandals, it's also one of the most pervasive. It's |
| Sadly, there was a time when this was mostly true. | | | | based on the absurd notion that stocks are nothing |
| Way back when, the commission charged for | | | | more than pieces of paper. |
| purchasing stocks was more than $100. Thanks to | | | | Stocks are not just pieces of paper. They represent |
| discount stock brokers like Charles Schwab and the | | | | actual ownership in a real, live business. When you |
| advent of the internet, buying stocks has never been | | | | own stock, you own a fractional share of every |
| less expensive. | | | | penny that the company earns and every dollar |
| For one, technology has reduced the spread | | | | that's in its bank account. |
| between the bid and ask prices. This means that the | | | | You even own its property, plant, and equipment! Of |
| prices you see scrolling across the TV screen are | | | | course, you are just one of many owners, and your |
| very close to the prices you will pay when purchasing | | | | share is undoubtedly very small - but you are an |
| stocks - off by only a few cents or so. | | | | owner, and this does matter. |
| Secondly, commissions are way down. Buying stocks | | | | Even if the stock falls on hard times, a bigger |
| now costs as little as $7 per trade through online | | | | company might come in and buy the company in full - |
| brokers like FirstTrade and ScottTrade. Purchasing | | | | usually at a healthy premium. When they buy the |
| stocks through E-Trade and Ameritrade costs less | | | | company, who do they buy it from? From you, and |
| than $10. | | | | all the other shareholders like you. |
| But if you're really on a budget, you should be buying | | | | The Truth - Purchasing Stocks is Inexpensive, Easy, |
| stocks through Sharebuilder, which allows you to pool | | | | and It's for Winners |
| your money with other investors, and add fractional | | | | Don't listen to the naysayers. You know that buying |
| shares to your account for as little as $1 per | | | | stocks is in your best interests, and you've probably |
| investment! | | | | been putting it off for far too long already. Give |
| #2 - You Need a Broker to Begin Buying Stocks | | | | yourself a basic education by reviewing articles at |
| For this myth, the naysayers exploit the popular | | | | informative websites like this one, and then get out |
| understanding of what a "broker" is. Yes, you do | | | | there and start purchasing stocks. |
| need a broker in order to begin purchasing stocks. | | | | After all, there's no better education than the one |
| But if you think a stock broker is a grey-bearded | | | | you'll receive when your real money is on the line. |
| know-it-all that you pay to make you feel bad about | | | | |