What are stocks?
Stocks are shares of a company, you literally own a piece of the company. Each stock allows you 1 vote. That is your say in the company.
Why are stocks so valuable?
Aside from representing part of a real company, the value of a stock is determined mainly by supply and demand. When supply is lower, and demand is high, the price of stocks go up.
Where do you buy stocks?
You can buy stocks through discount brokers, or your bank. I have a TD Waterhouse account. Commission fees range from 1-2%. In my case $29 minimum per trade.
What stocks should you buy?
Buy into a consumer monopoly. A consumer monopoly is a company with total control over a certain product/service that nobody else can steal. The opposite of a consumer monopoly is a commodity type business, where products/services are based solely on price. An example of a consumer monopoly would be Coca-cola. Though Coca-cola costs more people still buy it. Another example is Microsoft, they own the infamous Windows Platform. A commodity type business, which you should avoid, would be something like an airline or an oil company. An example would be Air Canada, tickets are sold based on price. Avoid companies with high debt and cyclicals. Cyclicals include mining companies, they have sporadic earnings and it is subject to cycles. A company that carries a high debt can be many. This includes GM. They have a multi billion dollar debt. Why? Because the money they make is put back into making new cars and car designs. They are also cyclical.
When to buy?
Buy a strong company, a consumer monopoly, when the market (or individual stock) has been pounded down. Buy stocks when "blood" is running in the streets. You can get good companies at low prices. The company will eventually recoup after whatever event.
When to sell?
Selling is just as important as buying. Especially if you're investing for shorter term you should know when to cut your losses. Always have an exit strategy. Don't get greedy and hold out for top dollar. You have to sell when everyone thinks it's good. And don't do this, don't sell, and then regret it when you see the stock going back up. Don't waste your time trying repurchase and make more money. It's very risky...and expensive. If you're strictly a long term invester (which i recommend) you don't have to stress out over little fluctuations.
Remember: Never invest more than you can afford to lose! And always, always research. If you have doubts, take your time. There will always be opportunity. You don't want to invest in a bad stock for the sake of investing quicker.
NEXt! =>