If you are young, have some extra cash, and you are inclined to save it for several years or more, chances are you have thought about investing in the stock market. Chances are also that you don’t know how you should start…

The first thing any younger person should do is get a feel for investing buy opening a brokerage account (Schwab and TD Ameritrade have the best customer support over the phone if you need to talk to a real person) and then transfer your money in from a bank checking or savings account.

Then, the best way to get started with any dollar amount under $10,000 is to buy a low cost S&P 500 ETF. If you don’t know the difference between and ETF and a mutual fund, you have more learning to do and may not be suited for investing. the SPDR’s and Vanguard ETF’s are the most widely traded and reputable. The tickers are SPY and VOO for the SPDR’s and Vanguard respectively. Schwab also has an ETF that if free to trade (i.e. there are no commissions if you trade on the Schwab platform) under the ticker SCHB. These are all good options and will perform virtually identical to the S&P 500 index (most people use the S&P 500 as THE gauge for the US stock market as it is a good representation of the US economy (the Dow Jones Industrial Average has only 30 stocks and while a traditional index, it is no longer an industrial index and has, over time, come to include a broader representation of industries; but is still limited to 30 stocks).

After you have accumulated about $10,000 in an S&P 500 low cost index ETF, you are ready to start building a portfolio of small positions in individual stocks. Five stocks is a the least you can have to build a diversified portfolio, and the least amount you can actually spend the time to research.

If you are ready to move to this step, click the link to follow shortly.