Question by Chris D: Investments/Trading Stocks/E-Trade.. Can anyone explain just the BASICS in all of the terms and “strategies”?
I am very eager to start an account on E-Trade or similar, and basically use the money I have now, invest it, and create more funds in this way.

Before starting I would like to know what I am doing, and know what things like stocks, futures, options, bonds, and brokerage mean. If anyone could just give a brief explanation on these sorts of terms I would really appreciate it. Thanks.
I know you can buy a certain stock at a price, and then preferably sell it at a higher price. But how does it work with how often you can buy/sell? I know that there are some kinds of limitations and requirements to stop the manipulation of markets and so on. Thanks.

Best answer:

Answer by Nessy
The compliance (regulations) governing places like E trade are actually quite lax. If you do not know anything about investing but only want to pay a smaller fee, there are accounts that you can pay a fee for at a brokerage house and get all the financial knowledge that your broker has to offer.

A brokerage house is a place where investors can buy and sell publicly traded companies, mutual funds, etc through there personal accounts. If you do not have an IRA or a 401k (retirement funds) you can open one of these here and start to save for your future.

A stock is ownership in a publicly traded company. You are entitled to dividends, voting for the board of directors, and voting for stock mergers. Go with Blue chip stocks or companies that have been around for a long time that will not go bankrupt. ie clorox (everyone needs to clean their bath.

Futures & commodities are you betting on companies that may do well in the future. These are risky.

Options are complicated and if you are not an experienced investor I would suggest you stay away from these unless you get a book and study them.

Mutual Funds was something curiously missing from your list. What a Mutual Fund is, is a company that invests in bonds, municipal bonds, cash, options, index’s all depending on the type of mutual fund. Basically all your eggs are in one basket but the basket has multiple compartments.

If you want more info on this contact me.

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