Understanding Stocks

6
C H A P T E R
Where to Buy Stocks
Although buying and selling stocks is easy, making money at it is hard
work. Many very smart people have tried and failed to beat the market.
If you’ve never invested in the market before, there is no need to rush.
The stock market will be there when you’re ready. The first step is to
open an account with a brokerage firm.
You may wonder how much money you need in order to get
started. (Some will say that you should invest only what you can cheerfully
afford to lose.) You can start investing in the market with $5000
or less, although it will be harder for you to diversify and thus reduce
your risk. With $5000 or more, it’s possible to create a fairly well diversified
portfolio.
Full-Service Brokerage Firm: Bells and Whistles
for a Price
Full-service brokerage firms include some of the largest and most influential
stock brokerage firms on Wall Street. These firms provide a huge
variety of financial and investment products. They pretty much have it
all, offering you investment advice, research, banking services, and the
ability to buy and sell stocks, bonds, mutual funds, and fixed-income
55
Copyright © 2004 by The McGraw-Hill Companies, Inc. Click here for Terms of Use.