As you can see, we have covered a lot of ground over all these chapters. Right now you are armed with enough information to be, well, dangerous! Don’t get us wrong, we are making a joke here, but the fact is that no one should start to actually trade until they get a chance to learn all they can about the daily workings of the markets. Watch how news affects stocks, how earnings reports can make or break them, and a host of other interesting manifestations of this business come into play. We suggest that one of the best things you can do is to subscribe to our publications and take a month or so to read what we are talking about, and then apply that knowledge to what you see happening in the real markets. We feel confident that soon you will be ready to make your first stock purchases on your own! Remember to start small; don’t go for broke on your first trade. The best thing you can do is “paper trade” at first. What is that? Simply use a pen and paper, and write down the stock you would buy, the price you would pay, and track your results. This way you haven’t spent a penny “testing” your knowledge. After you see that your paper trades are doing well, and then move up to your first stock purchases. Buy “small lots” like 50 shares at first. This way if you are wrong, the loss won’t kill you. For instance, if you buy 50 shares of XYZ thinking it will go from 50 to 60 dollars, and instead it goes from 50 to 47, you have only lost 150 dollars (50 times the 3 dollars it dropped, equals 150). If you had bought 1000 shares, that same drop would have cost you 3,000 dollars!
If you “go slow” and use helpful guides like ours, it is indeed possible that together we can turn you into a very profitable investor!
Good luck, and thank you for taking the time to study this material!
Bob Rinear and the Staff