People often ask me about the best way of getting into the stock market to buy shares. And generally they want to know how much money they need to have in order to invest, and whether or not they need a broker.

The golden rules of investing in the share market are to buy quality stocks and diversify to spread your risk.

Do your homework

Before you start any share market investing, research your options and educate yourself. Read books on trading shares, learn about investment terms and products, and do internet research. Devour magazines such as Smart Investor and read the business or money section of newspapers on a daily basis.

Avoid penny dreadfuls

Penny dreadfuls are cheap, highly speculative stocks and I don't advise buying them. They don't cost much as they're so risky and there's such a low chance they'll hit the big time and deliver gains. Popular penny dreadfuls tend to be resource companies - stocks that only cost a few cents now, but could deliver a big payday if the miner or oil company strikes it lucky. In recent years technology and dotcom firms have hit the penny dreadful market.

If you can afford to lose your money and want a bit of fun, sure, gamble on a penny dreadful. But this is no way to properly invest in shares and get solid gains.

Start with a managed fund

Since you're just getting into the stock market and don't have a lot of cash, start by investing with a managed fund and committing to a savings scheme. In a managed fund, thousands of investors pool their money into a fund run by professionals. These experts do all the research for you and they decide where to invest your money.

Your fund manager will send you regular reports on how the fund is doing and where they are investing the money and why. This is a great way for you to learn about the share market and investment strategies.

Many managed funds require you to invest at least $1000 on joining, but some funds let you set up an account with nothing as long as you commit to a regular monthly savings plan.

A savings plan is a great way to keep you disciplined and make sure you invest on a regular basis. You could invest, say, $300 at the start and commit to putting in $100 a month. It would really build up over a few years, especially if you reinvest all your returns.

If you want low risk and stable growth, go for a balanced fund that invests in a mixture of stocks and fixed interest. If you want higher risk, and hopefully higher returns, look at growth funds that invest heavily in shares.

Most big banks offer managed funds, as do some superannuation providers such as AMP. Make sure you find out what sort of funds are available, how well they're performing and the type of entry, exit and ongoing fees charged.

Use online brokers

It's only worth getting your own stockbroker if you have more than $10,000 to invest. Any less and their fees will prove too expensive and you'll find they won't give you much attention.

Stockbrokers charge you every time they make a trade on your behalf, and their fee is usually a percentage of the amount you're investing. This percentage drops as you invest more. The fee on a trade of up to $5000 can be around 2.5 per cent. That's $125.

If you know what you want to buy and sell, use an online broker such as E*Trade or Commsec. They charge about $30 for each trade, but you don't get any individual advice. Online brokers do provide research on companies and access to recommendations to buy, hold or sell - but you have to make all the decisions.

Online brokers are a great option for people who follow the market, as you have to do your own homework and know what you want to invest in.

The share market in general has been pretty volatile this year, so buy sensibly using informed advice and regard your investment as being for the long term.