by Matt Mahan

Created on: July 01, 2008

The best advice I ever received about the stock market, was the only advice I ever received, "Buy Low and Sell High". That advice was given to me on my eighteenth birthday by my father. If he had given me that advice today, I would have said "No Duh". Even the newest investor knows that little tidbit of advice, the question is, how do you buy low and sell high? There are a few tips that I have learned along the way, that have allowed me to be a better investor.

Do your homework. Investing in stocks, bonds, or funds is essentially legalized gambling. You as an investor are betting on whether a "position" will rise or fall. Doing homework may sound extremely basic, but you would be amazed at how many people make an investment without doing one minute of it. Homework would be characterized as reading the company statement, financials, find out who is buying and selling their shares, (that is called insider trading), and any new products or services the company has coming out.

When a person invests, usually they pay a commission or are charged a set amount for placing your buy or sell order. Using a service like sharebuilder.com keeps the fees lower than other "Houses". At last check, this site only charged four dollars a transaction with no minimum account. Four dollars compared to sometimes as high as four percent is quite the difference.

Investing in the stock market is a type of gambling, I have already covered this. Only invest in amounts you could afford to lose overnight. It happens that fast sometimes. An even better way to invest would be much like a 401K as you put a little in every week. Let it grow over time, it will not be so hard on your finances and it is a nice habit to have. You may pay a touch more in fees, but better to lose a little this week, than the house payment at the end of the month.

When you look around, look and see how often you deal with your investment. Many companies are listed on the stock market and you shop there all the time. McDonald's, Sears, and Ebay come to mind. Most everyone uses Google, (GOOG) great stock to own.

My last tip, and by no means the least important is diversify. Diversity in your portfolio means that all your money is not tied up in one company or sector. Spread your money around to the different sectors, if one sector drops you still have your other investments to help carry it.

Taking the time to follow these tips listed will allow you to be not just a successful investor, but a calmer one too. Investments are there to make you money, not make you lose sleep. Over time, your investments will grow and your financial future will be much bright.

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