By now you realize that participating in the Stockmarket can be a remunerative though risky activity. But assuming that you are ready to take on the risk, how do you participate? Depending on what you are up for, there are four ways that you can go about it.
Mutual Funds Edit
Mutual funds are probably the easiest way to go about it. While many individuals are fully capable of outperforming the average fund, most people are not prepared to put in the necessary effort required.
With a mutual fund, you are effectively hiring someone else to do the investing for you. You just got to hope that the fund manager knows what she or he is doing.
Fortunately, there are ratings services available. One such can be found at Morningstar.com. The American Association of Individual Investors also puts out an annual rating book as well.
This option is for people who want to invest directly in the market. Generally brokers come in two versions, Full Service and Discount. With Full Service brokers you will be recieving periodic advice on what to buy or sell. They can also sometimes serve as a security blanket.
For the more confidant investor, the Discount broker is the bettor choice because of the lower commissions.
Okay, so maybe you want to skip the broker and buy straight from the company you wish to invest in. In most cases that isn't going to happen. However, there are a number of companies that have chosen to make it possible, and consequently there are a number of Dividend Reinvestment Programs available. These are frequently accompanied by Share Purchase Plans.
Investment Clubs Edit
These are for people who want to invest directly in the market, but aren't quite ready to do it alone.