If a little child can do it? Part 2

If a little child can do it? Part 2

The father told his son, how he stood in line before the store opened and braved the crowds at Walmart, and how he almost did not get it. Then he handed the boy the gameboy, and the boy handed his father his savings, gladly to pay the price, however the father gave the money back to the boy, and said this one is on me. The next day Jonathan and his father opened a savings account.

January 2007, Apple makes a big announcement, that would change the smart phone industry, for that matter the cellphone industry, forever. This prompted the father to talk again with his son about buying stock. This time though, the father had leverage, Jonathan had gotten what he wanted, and had warmed up to the idea of buying some stock. What do you need to do first Jonathan? Jonathan replied, I need a broker account.

You need a Stockbroker
There are so many online stockbrokers, that you can practically go through the alphabet A to Z. It is free to sign up for an account, you only pay when you buy or sell a stock. This could cost as little as two dollars per transaction and as much as seventeen dollars per transaction. You will want to pick an online stockbroker that is a one stop shop. They should have all the tools to do research, which will probably include market news, graphs, charts, forecast tools, and market analysis. In this way you will not have to spend too much time on other site’s. I have no recommendations for who is the best fit for your situation, so here is a few brokers to help you with your selection. Zecco, E-trade, Fidelity, Scottrade, OptionsXpress, Sharebuilder, Tradeking and the list goes on and on. You should definitely do your research, some stockbrokers require you to have a minmum balance to open an account, however you will find plenty that do not require a minimum balance.

Since you are too young to have your own account we will use mine, said the father. What do you do next? We need to fund the brokerage account, that is right, I see you were paying attention.

Fund your new account
Funding the brokerage account can be as easy as linking your checking account to your brokerage account, most brokerage accounts will allow you to do online transfers to and from your account. Your brokerage account will have two separate accounts, one side will be cash and the other will be stocks.

Jonathan we have moved all of your money to the brokerage account except twenty dollars. Are we ready to buy some stocks? No DAD, we need to research, research, research, to make sure the company is worth my hard earned money, answered Jonathan.

Research, Research, Research
Research is essential to being successful in this game of chess. What do the charts say about this company? How do they handle there cashflow? Do they operate in the red, or are they financially stable? Are they profitable? Who are their competitors, and how are they doing? Question every thing until you are satisfied, that this is the right company to buy. We will explore these questions and more in my next post.

Disclaimer: I am not a licensed broker, and I do not presume to make you any promises that this strategy will work for you. The information is strictly for conversation, and if you choose to use, in whole or in part any of this information. You do so at your own risk.

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