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How Buffett Does It

Your First Steps Towards Investing in the Stock Market

Connor McGill, Business Columnist

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Wall Street has a tendency to use jargon, as words like EBITDA and Alpha can confuse you enough to feel that you need the assistance of a professional – and oh, what the heck is a Dead Cat Bounce? The following column will detail the steps necessary towards making your first investment, in the simplest terms possible.

The very first move you should take involves creating the means to purchase a stock. Unfortunately, you cannot just walk to the New York Stock Exchange and announce “Hello, I would like to buy 5 shares of Apple”, and expect the trade to occur. You need a licensed broker to trade on your behalf. I recommend low-cost online brokers to do the job for you. Research entities such as E*Trade and TD Ameritrade, and find which one best suits your needs. You will need to create a custodial account, which, in essence, proves that your parents are aware that you are investing in the market.

After this account is creating and monies are deposited, you can buy and sell stocks freely. Companies trade in shares of stock – meaning that one share equals one unit of ownership. The price goes up or down based on how many people are buying versus selling. Stocks are represented by symbols, which can be found by a simply online search. For example, the ticker symbol for Apple is “AAPL”.

Your first purchase should be in a well-known company. Try thinking about products that you like, and find the company that sells them. They most likely will trade publicly, meaning that you can buy a portion of them. Do you like Nike shoes? Buy Nike stock. How about Starbucks? Buy a share of them. It will make you feel better when you blow money on their products! Over time, if your company does well, the price will most likely appreciate and you will receive dividends from them. So be sure that you select a company that does well!

That is how to make your first investment in it’s simplest form. There are, of course, plenty of more involved approaches to investing that may work better than this, some of which will be detailed in the next column. In the meantime, please leave any thoughts or suggestions in the comment box below. Thank you for your readership!

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How Buffett Does It