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7 Best Ways To Learn Stock Investing For Beginners

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6 Best Ways To Learn Stock Investing For Beginners

Have you ever wondered how all of the experienced investors have started?

If you are a beginner in stock investing, it is important to first learn the basics.

Although there is an abundance of resources to get quality education, stock investing is not a simple subject.  Like learning a new skill, such as how to ride a bike, it will take some trial and error, a lot of practice and a determination to remain focused on the task.

Seasoned stock investors know that this is pretty much a game that lasts a lifetime.

While into the game, you need to continue learning and keep yourself abreast with the current trends and latest developments in the financial market.  The good news is that the strategies and principles that worked for many years are still relevant today – and they are easily accessible to most people.

Develop, Hone, Improve

The mere fact that it is a long-term game can be an advantage in itself.  Investors, even beginners, will have ample time to develop, hone and improve their skills.  The strategies never go out of style and can always benefit players.  More significantly, the investing game is always on and doesn’t shut down so you can go in or out any time.

How Do I Start?

So if you are a new investor asking the question: “How do I start?” –

I want to offer 6 possible answers:

1. Monitor And Follow The Market

News sites such as Yahoo Finance, The Economist, and Google Finance carry up-to-date information and serve as an excellent resource for new and old investors.  Sites like Wall Street Journal and Bloomberg carry in-depth coverage and analysis of the financial market.

Just a few minutes of going through the headlines and reading the breaking articles each day, new investors can get a lot of useful information about market trends, expert analysis, new concepts, and tools as well as an appreciation of the general business climate.  Those who are more inclined to study numerical data will benefit from charts, graphs, and indices published daily by numerous websites.

15 Minutes a day is enough

Just a few minutes of going through the headlines and reading the breaking articles each day, new investors can get a lot of useful information about market trends, expert analysis, new concepts, and tools as well as an appreciation of the general business climate.  Those who are more inclined to study numerical data will benefit from charts, graphs, and indices published daily by numerous websites.

TV shows and channels relating to business and stocks also abound and are a good source of information. They are a convenient mode to monitor the market daily.  Watching programs on CNBC even only for 15 minutes a day can already broaden your knowledge base and provide you with insights on investing.

Other options are Bloomberg Television and Fox Business News.  The trick is to focus on the content and allow the comments, data, tips, and discussions to sink in – try to zone out on the jargon and style of presentation.

A word of caution:  be very discerning and do a little validation because some of the shows may contain biased recommendations that may turn out to be totally useless or disadvantageous to you.

2. Remain Updated

The stock market is very dynamic and changes take place moment-by-moment.  It is imperative for the stock investor to remain updated of all relevant developments.  Practically every news, whether big or small, political, social or even entertainment creates an effect on the market. So if you want to survive and earn from stock investing, know what is happening around and adjust your investments accordingly.

Here are helpful tips for keeping yourself updated:

  • Read the newspaper daily. I still believe it to be one of the best sources of relevant information about the current events and the market situation.
  • Watch business TV channels and shows for quick updates. Channels like CNBC carry flash updates on matters that affect the market.
  • Visit relevant websites regularly. Good stock market websites post updated and real-time figures of stock values and movements.  I have seen some stock investors relying only on online information and they are still doing fine.  These websites are invaluable in providing investors with information on the current value of their stock portfolios. You can download and use one of the great list of apps that are relevant for investors.
  • Business magazines are also treasure chests of information. Although they do not come out as often as newspapers, they contain important articles that can help you a lot.  Some magazines cater to specific industry types and publish articles, periodic reports and statistics relevant to that industry so select one or two that is related to your stock holdings

3. Advice From The Experts

In the meantime, you might want to immerse yourself in some advice from the experts.  Check these out:

  • The book The Neatest Little Guide to Stock Market Investing: Fifth Edition
  • Download the web app Seeking Alpha so you can read about your stocks daily and get stock ideas and market outlook opinions.
  • Explore to get news and market insights.
  • Listen to the Motley Fool podcast for fresh stock picks and tips.
  • Read the business section of The Wall Street Journal and The New York Times
  • Watch Khan Academy’s videos on stock basics

4. Open Your Own Stock Broker Account

Search for a good online stock broker and open an account.  This may already be available through your own banks.  Look for one that provides convenient trading tools and then is familiar with how they work and with the other services of the site.

Some online trading brokers offer virtual trading as a testing ground for new investors.  This is a good way to learn to trade and invest without actually using the money.

Also, investing is more accessible than you might have thought – you can start investing with a very low budget. Don't forget to compare inexpensive stock trading platforms before you start.

5. Try A Stock Trading Simulator Before Trying The Real Thing

It is a good idea to learn to trade stocks via virtual trading, a feature available in many online broker sites.  This software allows you to simulate buying and selling real stocks without using real money so you can have a feel of how the game goes.  Once you learn the basics and are already comfortable with trading, you may start using real capital.  However, some will say that the best way for a beginner to get his feet wet in stock trading is to jump right in.

In any case, it is always wise to start small in the range of around 10 to 20 shares since the game does not differ regardless of a number of shares you trade.  Investing a large amount right away is particularly risky as a sudden loss might wipe out your capital and discourage you from proceeding further.  It is also a good idea to diversify your portfolio to different types of companies.

6. Paid Subscriptions And Services Bring Benefits

Paying for research and market studies have their own benefits.  You get the advantage of expert advice from professionals and learn from their mistakes and successes.  The internet is awash with paid sites that can help you learn stock trading based on your level of knowledge.  Just have some patience in identifying and selecting the website that offers the best quality and content that fits your needs.

A word of warning though to new investors:  some websites are merely scams designed to collect high fees from subscribers while providing outdated or useless information.  Do some background diligence checking on the sites to see if they are legit and can deliver what you want.

Now, if you are really keen on paying for a service, here are some suggestions:

  • Use trading e-books. Learning from them remains a popular and effective means for beginners.  However, there are still those who question their worth because some books that are sold very cheap are nothing but an inefficient diversion.
  • Attend trading seminars. Be prepared to pay a hefty amount for one or two of these sessions.  It is important to choose which one to attend because it may turn out to be merely an expensive meet-and-greet session with your fellow beginners.
  • Take online courses. You may find them very convenient for you as you can learn from the comfort of your own home or office.  However, will they serve your purpose of providing a useful learning experience?  Again, your choice of course and course provider will matter most.
  • Personal instruction, coaching and mentoring. This is the most expensive learning method because expert teachers charge high fees for their time and knowledge.  Is there a guarantee that you will become a successful trader under this method?  Unfortunately, there is still none.

These methods will also familiarize you with technical tools and assessment procedures such as stock scanning, charting, moving averages, spike indicators, etc.  Do not be too intimated by these tools because they are easy to learn and will be most helpful for you.  Just remember that when trading in any commodity, the price is still the best storyteller for you.  So once you throw your hat into it, make sure that you don’t let a day pass without checking the stock prices.

7. Books Still Do Their Jobs

No Doubt, books remain a reliable source of good information about trading.  They are also more inexpensive compared to learning classes, seminars and educational DVDs sold everywhere.  Jack Wickens has published a great article of the best books that every investor should read.  I propose these personal picks for your reference:

How To Make Money In Stocks by William O’Neil

Its sales record speaks for itself.  This national bestseller has shown more than 2 million investors a proven way to make wealth.  This book teaches O’Neil’s CAN SLIM™ Investing system, a game-changing 7-step process for minimizing risks and maximizing gains.

He provides proven techniques for picking winning stocks before their values go up (See how to find the best stocks for day trading).  He also gives tips on how to pick the best stocks, mutual funds and exchange-traded funds (ETFs) that will give you optimum earnings.  This book also details the twenty-one mistakes that new investors make so you can be forewarned before plunging in.  It also teaches O’Neil’s 80/20 approach to investing where your 20% effort can bring in 80% returns.

This book has been described as a classic by many authors and the recommended trading techniques, advice and strategies remain relevant and useful to this day.  This book is a must-have for every investor to jump-start their trading success.

A Comprehensive Guide to Trading Methods and Applications by John Murphy

This updated edition of an already outstanding reference book is even better for new investors.  This book has taught thousands of traders and investors the concepts of technical analysis and their utilization in the futures and stock markets.

It covers the latest developments in computer technology, technical tools, and indicators plus materials on candlestick charting, stocks, p/e ratio calculations and stocks rotation, Intermarket relationships featuring a barrage of true examples. The book has also been cited in Federal Reserve Studies and is used as a primary source in the Market Association Training Program.

Reminiscences of a Stock Operator Edwin Lefèvre

First published in 1923, Reminiscences Of A Stock Operator remains a widely-recommended book for both brand-new and experienced investors.  It basically is a thinly camouflaged biography of successful New England speculator Jesse Livermore in the turn of the century.  This book takes the reader on Livermore’s journey from being a quotation-board boy in bucket shops too.

This book takes the reader on Livermore’s journey from being a quotation board boy in bucket shops to the stock-price scalper and eventually to Wall Street trader where he made and lost money a good number of times.  Livermore’s trading rules and the price patterns he looked for are still applicable and are still used by today’s traders.

Reminiscences Of A Stock Operator is a good read both for its entertaining stories and educational merits. AuthorLefèvre’s records of observations about Livermore’s speculating, investing and the overall nature of the market make this a valuable material.

This book is a good read both for its entertaining stories and educational merits. AuthorLefèvre’s records of observations about Livermore’s speculating, investing and the overall nature of the market make this a valuable material.