The New York Stock Exchange, or NYSE, is the largest stock market in the world. Featuring top companies from every conceivable industry, the NYSE is home to the many traders who perform the actual transactions that allow investors to buy and sell shares of stock. Over a billion dollars pass through the NYSE annually, and anyone who is looking to grow his income can invest in the exchange with a brokerage account and some market knowledge.
Learn about stock investing. Investing is a risky business, and you want to be sure that you know what you're doing before you begin. What is a stock anyway? It is a share of ownership in a company. That's right, if you own stock in a company, it means that you have part ownership, and the company will send you voting materials. You buy stocks by placing an order through an account with your broker, which either owns or has access to a seat in the NYSE (there are around 1,400) and has real people on the trading floor who trade stocks. Why do stock prices rise and fall? How can you know when they will? There are many resources to help you learn the ins and outs of trading (see Resources).
Follow business news daily. You must get acquainted with the markets and business news if you want to invest successfully. Read the Wall Street Journal, which has updates on important NYSE-listed companies. Stock prices will most often follow company activities, so being on top of what's going on in the industry will help you know where stock prices are headed. Other good sources of information are Barron's and Bloomberg (see Resources).
Simulate the real thing. There are free online games that simulate investing in the real stock market, and they even offer cash prizes for successful "investors." Before investing your hard-earned cash in big-board stocks, try a fake version to see how well you know your stuff. You'll have fun trying it out, and you'll learn a thing or two about investing before getting into any risky situations. When you feel ready, transfer your portfolio over to a paid account.
Register for a brokerage account. If you go with a traditional brokerage house, you'll meet with a live stock broker and discuss a plan to invest your money. Stock brokers have experience, expertise and access to research reports about NYSE companies that give them a leg up on the novice investor. Of course, you'll pay extra for all of that, and you won't get any guarantees. Another options is to go with an online trading system — of which there are many — where all you pay is a transaction fee, typically around $10 per trade.
Choose a strategy. There are different reasons to invest your money, the two main ones being for retirement or to supplement income. Different goals will dictate different investment strategies. You may invest in riskier stocks with potential for higher profits, or more solid companies with an aim for slow and steady growth. There are many possibilities, but the key to a good portfolio is diversification — except if you are a true risk lover. This means investing in an array of stocks to reduce risk and increase the allover chances of high returns. One way to do this is to invest in a mutual fund that tracks the Dow Jones Industrial Average, a composite of high-cap NYSE companies.
Monitor your investments. You can check NYSE reports daily, as they are updated regularly on websites such as Bloomberg. Buy and sell as often as your strategy requires, taking into account news stories, company updates and price movements.
Items you will need
- Brokerage account
- Don't get suckered into a broker contract before you understand all of the fees and requirements.
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