Preparing for my first stock purchase – entry 001

(This post is part of a series of posts about being an investor newbie)

Investing $1,000 is not something to be taken lightly. So I decided the best first step was to understand the stock market and investing fundamentals, technicals, etc. I need to come up with a strategy to invest correctly in the stock market. I don’t just want to buy stock for the sake of being “in the market.” I want to invest so I can build wealth. That means I want to do it the right way. (I explain the background of this series of blog entries in a previous post – click here to read that one if interested).

Day 1 – I did some research on the internet to start learning about reading charts. I found this information to be overwhelming and perhaps too important to try and read on my iPhone. Note: Use the iPad or a computer next time.

Day 2 – I went to the college library and got a few books and even some old textbooks about the stock market. There wasn’t really anything good about investing, but some great information about the stock market itself if I was interested in what it is, etc. Note: I need to get our library to order some useful, modern (printed after 2005) books about investing.

Day 3 – I went to Barnes & Nobles and spent over $100 on books. Basically, I have to now earn a 10% return just to get my money back in the amount I spent on books! Note: Do a broader library search so I don’t have to purchase the books. I like sitting and using a highlighter so I would still find one or two books to purchase.

Days 4 – 7 – This concludes week 1 (The college was on Spring Break). I was reading sections of four different books. So far my favorite (and I believe most useful) is How to Make Money in Stocks by William J. O’Neil. I still have not completed my research so I am not ready to invest just yet. I have to research the various online trading services to determine which to choose. Note: What I have learned so far is that I will probably need to subscribe to a charting service (more $$) and watch the stock market EVERY DAY to track the progress of stocks and the overall market. More info will come next week as I complete my research.

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The three authors, Bill Pratt, Mark C. Weitzel, and Len Rhodes, are industry leaders in personal financial education. Together, they have a combined 75 years of experience in banking, economics, and entrepreneurship. Now, they teach thousands of students personal finance concepts and decision making skills, author textbooks and public press books on personal finance, and help schools develop innovative personal finance literacy programs. Recently, they were instrumental in developing a personal financial management certification program for leaders in higher education. The other books in The Money Professor series include The Graduate’s Guide to Life and Money and Extra Credit: The 7 Things Every College Student Needs to Know about Credit, Debt & Ca$h. Their books, lectures, and programs give students, parents, and educators the tools and knowledge to make good financial decisions all their lives.