The Stock Market For Beginners and Taxes by Sarah Hughes

The stock market for beginners can be quite an intimidating prospect. Figuring out all the terminology and what it all means can be overwhelming. Unfortunately, you must add that once you start trading stock, you will be responsible for reporting and paying tax on your trades.

Lets assume you bought and sold your first stock and where lucky enough to make a gain. Congratulations!....but you now owe taxes. You know the saying, "there are only two sure things in life......death and taxes". Sure enough, the IRS is going to want it's cut of that nice gain you just made. When you start stock market trading, you must be sure to keep good records of all transactions.

When tax time comes you are going to be required to fill out Schedule D and report the gain. In order to do this you are going to have to make sure that you have precise records of all your buys and sells and the dates they took place. Stock market trading just made your tax life a little tougher and there is nothing you can do about it.

It is important to note that every single time you sell a stock, whether it be for a gain or a loss, is going to have to go on that Schedule D. The brokerage companies are required to report all your transactions to the IRS and so there is no escaping it. If you fail to report your gains and losses, your information will not match what the IRS has on you and bad things will start to happen. At best you will be required to make your return correct and at worst you will owe more money in penalties and fines.

If the stock you sell for the year adds up to be a loss, you can use up to $3000 of that loss on your return. Anything over that amount in losses has to be carried forward until the next year. This is just another thing that makes reporting your stock trading gains and losses a headache.
The stock market for beginners is hard enough before you add in the taxes. Unfortunately, the government won't have any sympathy for you as they consider you rich for just having enough money to invest in stocks!

About the Author

Please visit my site Stock Market For Beginners which is set up to teach you everything you need to know to get started in stocks.

Stocks and Investments for Beginners by Chris Robertson

The stock market welcomes newcomers with open arms, but you should take precautions before jumping in with both feet. Stocks, bonds, mutual funds - all these can be lucrative sources of income if you know how the trading market works. These beginner tips can help you get started in the right direction for stock market success.

Common Types of Stocks and Investments

You can buy stocks in a variety of ways based on your financial situation, the risks you want to take, and your goals for the future. The two main types of stocks available are common stock and preferred stock. Common stock means having equity in a corporation. Preferred stock means the investor has equity that resembles both common stock and bonds, with a fixed percentage of the face value as its dividends. The prices of preferred stocks rise when interest rates fall, and vice versa.

Stocks are also categorized as mutual funds, penny stocks, growth stocks, value stocks, income stocks, and blue chip stocks. Mutual funds are securities that are diversified among many companies to reduce risk levels. You can buy stock in several companies with only one purchase or initial investment amount. Blue chip stocks are investments in well-established companies, which offer more stability due to the company's successful track record. Penny stocks are risky, low priced stocks that are traded outside of a major exchange, or "over the counter."

Stocks paying high dividends over a period of years are called income stocks. Growth stocks increase as a business grows and can also yield a high return. Value stocks are stocks that are bought while under-valued with the expectation that they will grow in the long term.

A bond is a type of investment that has a maturity date, at which time the investor receives a set amount of money. The amount is usually $1,000 per bond. There are corporate bonds, which are backed by a company, and U.S. Treasury bonds (T-bonds), which are backed by the U.S. government.

Forex trading is a form of stock trading in which a person invests in currencies, not companies. Currency trading can produce high yielding stocks as one nation's currency surpasses another in value, and it can be traded day or night through online resources.

How to Buy Stocks

Before buying stocks, bonds, or mutual funds, learn how each works and the amount of risk involved. Learn the basic principles of the stock market - how you can earn money, and how you can lose money based on the stock market's patterns. Develop a mentality for long-term goals and success, not only short-term wealth. The stock market, if worked right, can bring both short-term and long-term financial freedom.

Use the services of a stockbroker to buy stocks if possible. They do charge quite a bit, but can offer you the guidance you need as a beginner in the stock market. They can also manage your account for you, which is a huge time saver. If you have limited funds, there are also discount brokers (especially online) who might not offer full service, but can help you get started. You can also invest directly into companies with DRIP plans, or direct investment plans.

How to Pick Stocks

Pick your stocks carefully. Don't place all your hopes and dreams - and dollars - into one company. Diversify your investment among several companies. Buy stocks in well-established companies so you can afford to take a risk with a new company occasionally. Buy some mutual funds, which are less risky, for long-term growth. Diversifying your stock investments will help balance your portfolio and reduce your risk. Also, follow stock news carefully to find out which companies are steady in their earnings and which brand new companies have the most potential. Education is pertinent if you want to be successful with stocks.

Whether investing in stocks paying high dividends or mutual funds, approach the stock market slowly and carefully before buying stocks. Consider the stock market as any other business, with potential risks and rewards. You can easily use online resources to study the stock market and learn how it works. Go online today to start building your stock market portfolio!

About the Author

Chris Robertson is an author of Majon International, one of the worlds MOST popular internet marketing companies. For tips/information, click here: stocksVisit Majon's Financing\Investing directory.

Stock Market 2008 - Safe Growth Stock Investments for an Unpredictable Market

The stock market investing environment is certainly scary to a lot of investors in the short term. With fears of a recession on the horizon, along with problems like the falling value of the U.S. dollar, rising commodity prices, distressed credit ratings and problems with inflation, the thought of pushing new money into the stock market is definitely not a popular idea.

After testing the January lows somewhat successfully, I feel as though the market's conditions may finally be seeing improvement. In my honest opinion, we are oversold. While the market may continue a downtrend, an oversold market is no place for shorting... and reaching into the bargain bin in the first half 2008 may be the best move you ever make.

Looking into "safe" areas of the market, our selections are few and far between. Straying away from the popular markets like tobacco and discount foods, I want to highlight some areas of the stock market where high growth remains a potential... and risk remains somewhat in check. Which sub-industries am I talking about? Agriculture and Aerospace & Defense of course! :)

Agriculture

Out of all of the sectors in the stock market, agriculture is an investing hotbed that hasn't really slowed down or produced negative numbers for 2008. As we watched all of the pillars fall (banks, retailers, restaurants, etc.), agriculture's turn never came! The ag. commodities such as wheat, corn and soybeans have showed no signs of stopping their run-up, and the 2008 outlook out of these stellar companies has been nothing but positive. Whats more? Most of these companies come with low risk, despite high upside... something rare in today's market.

If you want to play this bull, and I suggest that you do, you want to keep a keen eye on Deere (NYSE: DE), Monsanto (NYSE: MON), Potash (NYSE: POT) and Mosaic (NYSE: MOS). Let's start with Deere. I feel that they are the safest way to play this ag boom because they are an industrials sector company by definition. I recommended this company back on February 11th, and my views really haven't changed. You aren't going to get a great valuation as they almost always trade at a premium to the market... but as long as you can catch a dip, I don't see this train slowing down any time soon.

Moving over to Monsanto, this is a fantastic investment if you can get in at an attractive price now. They recently announced a huge agreement with Becker Underwood and Plant Health Care to provide a new hybrid seed treatment platform. The Dow recently partnered up with Monsanto, and prospects are very good for the future.

Potash and Mosaic are really sitting on cloud nine right now. Even after we have seen a big drive into these companies over the past week, I think there is some space available and people really aren't being as aggressive as they should be. Mosaic is another stock that I recommended, this one back in late January, and their catalysts haven't changed. Their PEG is over 3. Ignore it. These ag. companies don't come cheap, but I see them continuing to stride upward.

Aerospace & Defense

Being an Industrials sector buff, you can't help but feel confident in the Aerospace & Defense industry. One thing that typically will not slow in recessionary times is the growth behind military contracting, national defense funding and aerospace development. With the ongoing war over in Iraq, there is a constant driver for most of the big five A&D firms, and much of this is guaranteed for 2008 and beyond. I like General Dynamics (NYSE: GD), United Technologies (NYSE: UTX) and Lockheed Martin (NYSE: LMT).

I want to recommend Boeing (NYSE: BA), especially with their currently dirt-cheap valuation versus their historical trading range, but I just can't see through this cloudy future. Personally, I want to own them now, but with the disputes and such after losing a contract to a combined Northrop-Grumman and Airbus EAS team, their future is somewhat uncertain. Instead, I like General Dynamics. Not to be cliche, but Jim Cramer recently devoted an entire segment to this A&D powerhouse. They are the biggest holding in the industrials sector of the Nittany Lion Fund, LLC that I help manage, and we are very confident in their future success. If McCain is elected, this is a superstar. But even if he's not, this company is still secure in its fundamentals and is trading at a discount in a bullish industry.

The Aerospace & Defense industry is red hot, safe, and trading at a discount to its historical premiums despite leading the market averages this year. With this in mind, I like United Technologies and Lockheed Martin in addition to GD. UTX recently made a proposal to acquire Diebold, which would position United Tech for some solid growth opportunities overseas. All future implications remain bullish on the stock, and analysts seem to be loving this, the biggest domestic aerospace & defense company, for the future. Lockheed Martin is your typical flawless company that continues to impress. These folks don't disappoint and have had remarkable fundamentals and cash balance for as long as I can remember. LMT is safe and at an attractive price!

As investors, we need to look for safe havens like Agriculture and Aerospace & Defense for predictable growth, stability and recession-proofing measures in order to continue to grow our portfolios. I wanted to touch on commodity-tied stocks like those tied to Gold, Oil and Natural Gas... but we will be touching on those soon, so we will save the best for last. Focus on the Ag. and defense companies if you, like me, can sense an oversold market with some bargain prices up for grabs. Its one thing to catch a falling knife, but these industries really haven't fallen at all... so they are ripe for investment.

-The Net Fool

The author of this article is Jim "The Net Fool".

He is owner of theNetFool.com If you'd like to learn more about the stock market, you can visit http://www.thenetfool.com You'll find all the information you need!

Article Source: http://EzineArticles.com/?expert=Jim_R_Regan

Smart Stock Investing - Do You Have Time to Exit a Trade if it Goes Wrong?

Take your time

The US Securities and Exchange Commission have a great piece of advice for smart stock investing: Online trading is quick and easy, online investing takes time. This is very true. The proliferation of online brokerage accounts offering instant trading facilities for very low fees means that it has never been easier for individuals to trade a stock.

Trading a stock may have become easier and quicker however making a smart stock investment still requires the same amount of research and risk assessment. Do not go off and buy the moment you feel a trade may be a good investment, instead go away and do some more research.

Always have an escape route

If you want to make smart stock investments always make sure you have an escape route in case the trade goes wrong. A simple and effective way is to set a stop loss limit with your broker so if the price falls to a preset level, your stock will be sold, limiting your loss.

If your broker does not offer stop losses then another option is to always make sure you have access to market information and a phone so if the market moves against your stock, you are firstly aware and secondly able to contact your broker to again close the position out. Obviously if you have a massive trade on in a period of market instability, going on a 4 week jungle trek in South America with no mobile phone probably isn't the best option.

If you want to find out more information about smart stock investing, learning to trade commodities or investing in general, please visit the authors website.

Article Source: http://EzineArticles.com/?expert=James_C_Kerr