Chapter 5: Starting Small

Chapter 5: Starting Small

Have you been sitting out this bull market because you don't know how to get started? Or, maybe, you're just hesitant to start investing? Look around, there may be an easy opportunity for you to jump in.

Say you've got a CD earning 6.5 percent and it's about to mature. You'd love to put it into something, but you think a broker will scoff at a novice like you, or the commission is going to eat up a chunk of your cash before you ever buy anything. Thanks to the wild, wacky Web, this is a new era for investing. Your concerns are no longer valid.

A Different World
If you decide to go solo, with an account through an online broker, you can completely avoid human interaction -- if YOU choose. In fact, the good online brokers make reams of great research available through their Web sites, so you can look into stocks at your own pace, sifting through information like earnings reports, analysts' expectations, and insider trading activity.

And the cost to buy or sell up to 1,000 shares via the Web? Under $30 for brokers like Schwab, and under $15 for online brokers like E*TRADE.

But you don't have to buy a thousand shares. Start small, in 100-share lots (or less), for example, to get your feet wet. By paying a commission that's less than a good Macanudo, you'll have the opportunity to log on and watch your stock move up -- or down (don't forget that, either!).

Maybe all of this sounds great, but you're still not ready to plunge into the market on your own. Consider creating a watch portfolio.

Exercise: How to Set Up a Watch Portfolio
Monitor your stocks -- before you buy -- with a watch portfolio.

1. Use an online service to open a watch portfolio. May we suggest you
do so at MSN Money.

2. In order to use the MSN Portfolio, you'll either have to have a
Passport ID and password
(which you already have if you use Hotmail or have registered with any
MSN Web site) or you'll have to register to
receive your Passport username and password. Completing Passport
registration is fast, easy and safe, so it shouldn't be an obstacle. If
you're already registered with Passport, log in.

3. Choose your portfolio type and follow MSN's instructions to create a
watch portfolio.

4. You can track more than 50 types of information, such as "P/E
Ratio," "52-week highs and lows," and "risk category." Or change the way the
data is sorted to best suit your needs. When financial conditions are
ripe, such as during the next market dip, you may want to buy your
stock.

5. Not sure which stocks to watch? MSN Money's powerful new finance
tool, the StockScouter stock rating system, is an easy way to compare and
research stocks. Under the hood is an analytical engine built on
sophisticated mathematical models once available only to professionals. Check
out today's list of 50 top-rated stocks.