HOW DOES THE STOCK MARKET WORK? I WOULD LIKE TO INVEST A SMALL AMOUNT IN A COMPANY AND SEE IF I GET ANY PROFIT

Given your question, I would not advise you to jump into investing without researching how the markets work and how to evaluate companies. Your comment sounds more like gambling than investing. There are a lot of great resources on the internet that will help you begin investing. One of the best resources I can think of is Investopedia, a website dedicated to investor education. Check out the tutorials and some of the articles. This should help you greatly. When you think you have a firm grasp of it, open an account on Investopedia that will allow you to practice trading in a virtual account that requires no actual money. You should try to develop a strategy that works well for you consistently, then finally you will be ready to put your efforts into action. Open a brokerage account and begin investing, some of your best learning, that you could not acquire anywhere else will come from experience. If you are interested in investing a small amount of money, as you have said, I would suggest you research ETF’s and how to use them properly, as it will greatly reduce your risk. This, too, can be done on Investopedia’s website. A lot of the information that you will need to look up to evaluate companies can be done on Yahoo! Finance. I have included these links below, I hope they help.

Best of luck!

Brendan Prewitt

When you purchase stocks you pay for making that purchase. If you are using a financial advisor or an investment representative, that charge could start at $75 plus a percentage. However, they would give you advice on what stock to buy. You will also pay the same amount to sell the stock.

If you buy it through E-Trade or other online, the charge is much lower.

The value of the stock will go up and down throughout the day and from day to day. If the company is doing well and making money, the price should rise and the company may pay you a dividend. However, even large companies go through slumps where the stock price drops.

If you don’t know much about the stock market, it would be better for you to choose a safer investment such as a gic or money market account. The rate of return would be guaranteed and you would be assured that you would not lose your money.

Q1: How does the stock market work?
A1: That’s a very loaded question. I would suggest reading some books to understand the history of the stock market and the basics to trading. A good book to start w/ is “Wall Street Journal’s Complete Money & Investment Guidebook” by Dave Kansas. After that book then perhaps some Jim Cramer books, ie “Real Money” or his latest “Watch TV, Make Mad Money”

Q2: I would like to invest a small amount in a company and see if I get any profit.
A2: Although the above really wasn’t a question, I still would like to respond by letting you know that sounds a lot like gambiling. I really think your best bet (no pun intended) is to read, read, read and read some more for about a year. By then, you should have a decent understand of how the market works to start investing intelligently. You should also be tuning in to CNBC from time to time to complement your reading. Some shows on this channel that is entertaining is Jim Cramer’s Mad Money and Squawk Box. If when doing this, you find this to be boring or of no interest to you whatsoever, then you really should just hire a professional to help you make your financial decisions.

Hope this helps.