I want to start investing in stocks and shares. Any helpful tips?

Compare the transaction cost of buying and selling individual shares.
A new investor should start with mutual funds in order to get professional help and diversification. Look for NO LOAD funds and general market index funds as a way to start.
Pick a few name stocks and watch what happens to them on a web site like Yahoo. Check them weekly to see what news comes out about them, how the general market affects them etc.
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Investing in stocks means doing some homework…finding out about the company that you're considering investing in. You also need to think about how much money you're willing to risk because not every investment brings a profit. Some companies allow you to set up a plan with them directly where dividends can automatically be reinvested. This is one way to start out small and eliminate brokerage fees.
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The best thing for an investor who doesn't want to spend a lot of time analysing the market and individual stocks is to invest in index funds and bonds. This way, you avoid the risk associated with individual stocks and get a greater possibilty for return than if you simply left your money in the bank.

However, you are still open to the risk of the market. The thing to remember is that while the market can move up and down, over the long-run, it moves up. So put your money into bonds and index funds and leave it invested.
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For sure, Invest in companies that you think will have an increase in profit. If you invest and others do not buy shares your investment will probably lose value.
Unless you sell short, your loss in limited to what you put in except for fees some charge for account maintenance.
Use Yahoo finance to check out prospective investments. Look for rising trend lines and a PE that is similar to the market as a whole.
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If you're serious about investing, I recommend that you learn as much as you can about the process before you actually commit your money to anything. I would spend some time reading about the terms of the stock market, famous investing strategies and maybe start a portfolio of investments to watch that you don't actually own (just go to finance.yahoo.com and create a portfolio as if you owned the stocks). Once you have a good understanding of how to invest your money, you will be able to make educated decisions and eventually get higher returns on your investment.

For your other questions:

You want the companies you invest in to increase in profit (since this means that their business is making more money and becoming more valuable) this drives the stock price up.

You should invest in companies that you think people WILL buy. If more people want to buy a certain stock, the demand increases and the price goes up.

Normally, when you trade their are commissions that you pay to your broker, these vary on the size of your trade, broker, etc. On an investment, these commissions would mean that you lose money unless you get returns to compensate for the commission. Lots of times you incur a "minimum" charge, no matter how small your investment, and this switches to percentages after you increase how much money you are trading. Unfortunately, this makes certain small trades uneconomical. Ex. If you invest $100 dollars and the commission is $40, you need to earn a 40% return to break even. Obviously this is bad for you. I would check in with your brokerage firm to see their rates etc. and then factor that into any calculations that you do.

Hope this helps, check out websites like Forbes, Bloomberg and the Wall Street Journal to learn more about markets and investment techniques and a quick internet search will result in plenty of beginner investing tutorials.

Good Luck.
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