How to Invest Money in the Stock Market
You don't need a degree in finance to learn how to invest your money. You
need plain, clear explanations of the most important—and
Even though finance and investing sometimes seems like maze of jargon and
conflicting advice (ETFs! REITs! Index funds! Penny stocks! Inflation! Taxes!),
you can learn how to invest money and build real wealth in the stock market on
This is our How to Invest guide; a series of articles written in
plain English for the average investor. You can start from the ground up and
learn only what you need to know from creating an online brokerage account to
making your first trade to picking great stocks you can hold for years.
You can also search our entire library of articles:
How to Invest Articles
- Are Stock Buybacks Good for Value Investors?
In the 2010s companies have been buying back their own stocks more than ever. Is this good for value investors?
- What is Yield?
What is yield? How measuring future income from an investment works--and why it matters.
- How Much Money Would Change Your Life?
How much money would change your life? You may need less cash than you think to make your world much different.
- What is a Stop Loss Order?
A stop-loss order can help you lose money if your stock price goes down. It can also cost you money.
- Why Should You Roll Over An Employer 401(k)?
Switched jobs? Should you keep your previous employer's 401(k) or roll it over? Roll it over -- here's why!
- What is a Stockbroker
What is a stockbroker? Requirements and duties of brokers and how they help manage your investments.
- What Does a Trump Administration Mean for the Stock Market?
What is the result of a Trump presidential administration on the stock market? How investors can protect against economic uncertainty.
- What is Short Selling?
What is shorting? How to make money by short selling: gambling that a stock will lose value.
- What is a Stock Bubble?
What is a stock bubble? Why stock prices may be higher than average and why you might want to wait to buy.
- How to Invest in Index Funds
An index fund investing how to: what they are, why they make sense, and where to buy them at the best prices.
- What is Earnings Season?
Earnings season comes to the stock market four times a year. What this means for the stocks you buy and the businesses you hold.
- What is Self-Directed Investing?
What is self directed investing? How do it yourself investing works and why it might get you better returns in the long run.
- What is Active Investing?
An active investing strategy pursues frequent buying and selling. Why investing in stocks and funds on your own may help you build wealth in the market.
- What is Passive Investing?
What is passive investing? The simple way to buy and hold stocks, and why it can work well for your portfolio.
- How to Make Money in Stocks
How to make money in stocks: a guide for beginners to set proper goals and avoid the biggest mistakes.
- What is Fundamental Analysis?
Successful businesses have successful stocks. What is fundamental analysis? How understanding the underlying business helps you find great stocks.
- How Do Interest Rates Affect Stock Prices?
How do interest rates affect stock prices? The basics you need to know about the Fed, inflation, bonds, and bank rates.
- What is the Quick Ratio?
What is the Quick Ratio? Why this simple financial measurement can tell you whether you should skip buying a stock--and what it can't tell you.
- What is Market Capitalization?
What is market capitalization? The size and popularity of a stock influences whether it's worth investing in right now.
- What is Dividend Yield?
What is dividend yield? Understand the dividend-price ratio and quarterly payout of a stock to make better investments.
- How Does Portfolio Churning Affect Your Returns?
What is portfolio churning? How is churning defined in finance? How turnover in your investment portfolio affects your returns.
- What is Portfolio Rebalancing?
What is portfolio rebalancing? Should you rebalance your investments? Why and how often?
- Should You Sell Stocks in December?
Should you sell stocks in December? Why end of year portfolio rebalancing may not make sense--especially with capital gains taxes and the January Effect.
- Why Does The Media Cover the Stock Market So Poorly?
Why does the media cover the stock market so poorly? Why are the stock market ups and downs always in the news?
- What Does the Efficient Market Hypothesis Mean for Value Investors?
The efficient market hypothesis suggests that stock prices always reflect the underlying value of the business. Can value investors still find bargains in the market?
- What is a Cyclical Business?
What is a cyclical business? When and why does it make sense to buy stock in a cyclical companies?
- What Makes a Risky Investment Risky?
What makes a risky investment risky? Why make an investment if you know it has risk? Why high risk stocks may or may not make sense for your portfolio.
- What is an Economic Moat for a Stock?
What is an economic moat? Why a durable competitive advantage can help your stocks make money!
- Is There a Secret Formula to Pick Good Stocks?
Good stocks are hiding in the market, waiting for you. Is there a secret stock picking formula? How do you choose great investments?
- What is a Safe Investment?
What is a safe investment? What makes an investment safe? How do you choose a level of safety for your portfolio?
- Why Do Companies Perform Stock Buybacks?
What is a stock buyback? Why do public companies perform buybacks? When does this make sense? What does it do for investors?
- How to Double Your Money
How to double your money; investing in stocks can build you wealth, if you find a good rate of return. The math is simple.
- What is a Good Annual Rate of Return?
What is a good rate of return on investment? How much should your stocks grow every year? Why the ROI percentage is useful.
- When to Sell a Good Stock
When should a value investor sell a good stock? What to do when a stock doubles in value; how to profit from great investments in a buy and hold portfolio.
- When is the Right Time to Buy a Stock?
When to buy and sell stocks. The best time to invest depends on you understanding the value of what you're paying for.
- Always Choose Employer Matching 401k Contributions
When should you elect to receive employer 401k matching? Always take free money! How 401k matching works and why to do it.
- Should You Invest in ETFs?
What is an ETF? Is an ETF better than a mutual fund? Before you buy an exchange-traded fund, understand this!
- What Makes Good Stocks Good?
What makes good stocks good? What great stocks are worth buying? They represent strong companies which know how to make money.
- When Should You Open a Roth IRA?
When should you open a Roth IRA? What this post-tax investment does, why it matters, and why you should invest in your Roth IRA (or shouldn't).
- What is Dollar Cost Averaging?
What is dollar cost averaging in stocks? How to buy low and sell high regularly, and when cost averaging investing does and doesn't work.
- Are Annuities Good Investments?
What is an annuity? Does it make sense to invest in an annuity? What options for retirement planning make sense for you?
- What is a Small Cap Stock?
What is a small cap stock? Should you invest in small companies? Why these businesses may offer great opportunities for individual investors.
- How to Invest $1000 in the Stock Market
How to invest $1000, whether every month or all at once. Where to put your money for a safe and sound foray into the stock market.
- What is Liquidity in Stocks and Financial Instruments?
Liquidity is your ability to buy or sell a stock on any given day at a given price. This affects your investments--and the money you can make.
- Should You Invest in Insurance Stocks?
Should you buy insurance stock? Insurance is boring, but sometimes the most boring investments offer great opportunities to buy!
- What is a Tenbagger Stock?
What is a tenbagger stock? How to find a stock which will double, quadruple, or multiply your gains ten times, thanks to super investor Peter Lynch.
- What is the Difference Between Trading Stocks and Investing?
What is stock trading? What is investing? The mechanics are similar, but the goals are different.
- How Do Stock Brokers Make Money?
How do stockbrokers make money? The answers could have implications for your investments!
- What is the Book Value of a Stock?
What is the book value of a stock? Why book value matters when investing in a company.
- What is the myRA Retirement Savings Account?
What was the myRA retirement account? How could low-income workers start retirement savings safely and easily?
- What Did Quantitative Easing Do to the Stock Market?
What is quantitative easing? Why did the Federal Reserve buy bonds? What did the Fed's QE bond buying program do for the stock market?
- What is the Current Ratio?
What is the current ratio of a stock? What measuring short-term obligations means and why liquidity metrics matter to investors.
- Are Online College Stocks Worth Buying?
General education stocks--including for-profit education companies--have seen growth lately. Are online college stocks worth buying?
- Risks of Penny Stock Trading
Penny stock trading is a risky technique. The upside is large, but trading cheap stocks can lose you money!
- What is Free Cash Flow?
What is free cash flow? How to measure a company's financial health by measuring profit, revenue, and actual money in the bank.
- What is Online Stock Trading?
What is online stock trading? If you can do the research to pick stocks yourself--and you can--online trading may save you money and help you build wealth.
- What is Discounted Cash Flow?
Discounted cash flow helps investors decide how much to pay for an investment based on the money the company generates.
- What is a Discount Stock Broker?
What is a discount stock broker? Investing online as a self-directed investor with a discount brokerage can multiply your profits!
- What is the P/E Ratio?
What is the P/E ratio? How to measure the value of a stock with the stock price to earnings ratio.
- How to Buy Dividend Paying Stocks
Stocks that pay dividends are a great way to get recurring money. How to buy dividend paying stocks--and how to find them.
- Should Value Investors Time the Market?
What is market timing? Some investors seek the highest highs and lowest lows, but you can't predict market prices. Here's why value investing works anyway.
- Why Do Companies Pay Dividends?
Why do companies pay dividends? When does a company issue dividends, and what does quarterly income mean for your investments?
- How to Make Money with Penny Stocks
Looking for cheap stocks? Three strategies explain how to make money with penny stocks. Reduce your risk!
- Why Does the Dow Change the Stocks it Tracks?
Why did the Dow Jones Industrial Average swap GE for WBA? Why drop AT&T for Apple? What does this mean about the economy?
- What is the Stock Market?
What is the stock market? An explanation of investing for novices and newcomers to the world of trading public stocks.
- Should You Buy Stocks Online?
How to buy stocks online for beginners. How to get started buying stocks yourself--improve your investment return!
- What is a Hedge Fund?
What is a hedge fund? What their managers do--and why the wealthy love and hate hedge fund investments.
- Buy the S&P Index Fund
Serious investors know the value of an index fund. Here's how to invest in the S&P 500 index fund, through Vanguard or otherwise.
- What is the Share Price of a Company?
What is the share price of a company? Whatever you pay for a single piece of stock or its debt. Sometimes that price is wrong; you can make money from that!
- Is Buying Stocks Online Safe?
Why buy stocks online? It's often much cheaper than going through a traditional broker. How to make it safer too!
- Understanding Investment Risk
Stock investing has risks; how to understand, plan for, and manage risk to protect yourself and build wealth--and the hidden risk all investors must know.
- What is an Index Fund?
What is an index fund? Why the simplest way to get good returns from the stock market is the best investment to start with!
- What is a Stock Dividend?
What is a stock dividend? Learn how a dividend paid out in fractional shares is different from the cash dividend you're used to.
- A Stock Market How To For Novice Investors
A stock market how to guide--investing and building wealth with stocks and value investing.
- What is Investment?
What is investment? How does the stock market work? How to invest wisely, even if you have little money.
- Why Do Some Companies Not Pay Dividends?
Why do some companies not pay dividends? They might have better uses for the money! Alternatives to dividends and what they man for you.
- The Current Price of Silver Today
How much is silver worth? How to invest in silver (including why silver is measured in troy ounces and its current price).
- What Do Stock Market Symbols Mean?
What do stock symbols mean? They're shorthand ways to refer to shares of a company's stock. Some of them have interesting histories and meanings.
- Stocks and the Fiscal Cliff
What happens to stocks if we fall off the fiscal cliff? What might happen in the market if the US defaults on its debt.
- Facebook Stock Price and Value
What is Facebook's stock price? What does that represent and how should that affect the way you invest?
- Stock Brokers and Investment Brokers
What do investment brokers do? What is a stock broker? What do these brokers offer regular investors?
- Should You Invest in the Highest Dividend Paying Stocks?
Stocks that pay dividends can be great to own, but chasing the highest annual payouts may cost you in the long run. Here's why!
- Should You Invest in Gold or Silver?
Is investing in silver wise? How about investing in gold? Read this before you buy precious metal coins or bullion.
- Investing Book Reviews
Investing books reviewed and recommended. Value investing explained; learn how to invest in the stock market with these great guides!
- Learn the Stock Market
Learn how the stock market works, how to make money in the stock market, and how to find great investments. Investing Basics 101.
- The Best Stocks to Buy Now
The best stocks to buy now aren't always flashy or hot. What's the secret great investors use to find good stocks to invest in now?
- Should You Buy Penny Stocks?
Looking for penny stocks to buy? Cheap stocks may seem attractive to novice investors, but is this a path to riches?
- What Happened to the Stock Market Today?
What happened to the stock market today? Interest rates are rising in 2018. Tariffs and trade wars may be coming. Why is the market up or down?
- Benjamin Graham, Value Investor
The Benjamin Graham value investing strategy is still one of the best ways to make money with stocks in the market today.
- How to Invest in Stocks
Take your first steps to investing in stocks by learning the tools of successful investors: how and what to invest, and how to build wealth in the market.
- How to Pick Good Stocks
Learning how to pick good stocks is about patience and research. How do you know which stocks to choose? You do your homework—and use good tools.
- What Happens When Stocks Go on Sale?
What happens when a stock price falls? What makes stock prices go up and down? When everyone starts to sell, smart investors look for bargains.
- Happily Ignoring IPOs
Should you buy stock in an IPO? Didn't get an invitation to a big tech IPO? You're probably better off ignoring it.
- What is a Margin of Safety?
What is a margin of safety? An easy way to reduce the risk of value investing! How to use safety margin calculations.
- What is Free Cash Flow Jitter?
Free cash flow is vital to value investing. Free cash flow jitter measures trends over time to demonstrate the stability of a company.
- What is Dividend Reinvesting?
What is dividend reinvesting? Should you reinvest dividends? What reinvestment means for your stock portfolio?
- What is Present Value?
What is the present value of an investment? The right price to pay for a stock depends on how much you want to make. Understand and calculate present value!
- What is Intrinsic Value?
What is the intrinsic value of a stock? Every share represents a represents a portion of the business's value. Use intrinsic value to calculate its worth.
- What to Consider Before You Buy a Stock
Learn how to research a company before buying stocks. Consider the business behind it. Do you know its story? Can it grow per your expectations?
- What is Cash Yield?
What is cash yield? How to analyze stocks with free cash flow yield and more reliable earnings figures.
- Comparing Debt to Assets for Stocks
What is the debt to asset ratio? The relationship of a company's debt and liabilities to its assets is vital to its long term survival.
- Earnings Matter Most
Only those companies that actually make money survive. Earnings are the most important financial measurement of an investment!
- Rethinking Loss in the Stock Market
Losing money on a stock hurts. Everyone wants to avoid bad investments, but maybe we think about paper losses the wrong way.
- What are The Dow, S&P 500, and NASDAQ Indexes?
What is the Dow? What is the NASDAQ? What is the S&P 500? An overview of three influential stock market indexes.
- What are Broker Fees (and how to pay less)?
Why are broker fees so high? Should you pay a broker to manage your investments? Usually not; investment brokers may not have your best interests in mind.
- What is Value Investing?
What is value investing? How looking for good companies with discounted stock prices can help you build wealth in the stock market.
- The Buy and Hold Philosophy
The buy and hold long term stock investing strategy is simple and effective. Why avoiding frequent transactions can save you real money.