Ask Laz: Starting to invest: It’s not as tough as you might think

Darlene probably speaks for a lot of people:

“I don’t have a lot of money, but I’d like to learn how to invest,” she says. “Any suggestions?”

First of all, props to you, Darlene. Any step toward better money management is a step in the right direction -- and it’s not as difficult as you might think.

There are plenty of websites out there that purport to get the novice investor up and running. Many are legit. Some are just trying to steer you toward their own trading services, so be careful.

ASK LAZ: Smart answers to consumer questions

Your first step should simply be learning the lingo. What’s market capitalization? What’s a price-to-earnings ratio? Check out this glossary at MoneyInstructor.

A good overview of what the budding investor wants to keep in mind can be found on the Investopedia website. CNN Money also has a good rundown of the basics.

Probably your most important decision is how much risk you’re prepared to face. Riskier investments can be more rewarding, but they can also wipe you out.

You might want to be financially cautious at the beginning, perhaps gradually ratcheting up your risk factor as you gain confidence in your understanding of the financial terrain.

Mutual funds are a good place to start. Check out a plain-vanilla fund representing the S&P 500 stock index -- that is, 500 large companies generally thought of as the big dogs of the marketplace.

Watch how it performs day to day, week to week. This will give you a sense of market trends and how real-life events -- economic news, political issues -- can affect stocks.

You’ll need a way to access the market. Pick a discount broker, such as Charles Schwab, Fidelity or E-Trade. Explore the firm’s website to see what tools are available. Spend some time seeing how you can kick the tires of possible investments by looking at performance history and ratings.

Finally, keep your eye on the ball but don’t obsess. Markets go up and markets go down. If you’re in for the long haul, you’ll ride out the hills and the valleys.

And don’t forget about retirement planning. Once you’re comfortable investing your money, make sure you have a solid game plan for the future.

If you have a consumer question, email me at asklaz@latimes.com or contact me via Twitter @Davidlaz