He or she is not there to offer any advice the same

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Unformatted text preview: and tell the broker that you want to buy or sell so many shares of a given stock. The broker will simply execute the trade for you. He or she is not there to offer any advice. The same process can be undertaken online. You go to your broker’s Web site, log in by entering your username and password, and then buy or sell stock. You may submit an order to buy 100 shares of stock X. Your online broker will register your buy request and then note when it has been executed. Your account, easily visible online, will show how much cash you have in it, how many shares of a particular stock you hold, and so on. Deciding Which Stocks to Buy You can use various methods to decide which stocks to purchase. The first way is to simply buy shares of stock that you think are going to rise in price. So you might buy 50 shares of Microsoft, 100 shares of General Electric, and 500 shares of Disney. It’s fun to check your stocks each day in the paper or on your computer— when they’re going up. It’s not so much fun if they are going down. Get some expert advice and do some research before you buy. Section 1 Stocks 437 16 (428-459) EMC Chap 16 Rather than trying to select the biggest winners, some investors choose to “buy the market.” If the market as a whole does well, these investors do well. index A portfolio of stocks, which represents a particular market or a portion of it, used to measure changes in a market or an economy. 11/18/05 9:33 AM Page 438 Mutual Funds Another way is to invest in a stock mutual fund, which is collection of stocks. The fund is managed by a fund manager who works for a mutual fund company. For example, Smith may operate mutual fund Z at mutual fund company Z. If you put, say, $10,000 in mutual fund Z, you are in effect buying the stocks in that fund. Let’s say that fund consists of stocks A, B, C, W, and X at the current time. The fund manager may, on any given day, buy more of A and sell some of B, or sell all of C and add stock D to the fund portfolio. It is up to the fund manager to do wha...
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