The Exact Words
Quotation marks can be used to show actual words spoken or written.
Examples:
 Anna looked up and said: "It's true. The dog ate the key." 
(The words within the quotation marks are the exact words that Anna said.)
Her performance proved beyond all doubt that she was "simply the best".
(The words "simply the best" are a quote from a well-known song.)
The sign clearly states, "Thieves will be prosecuted."
(These are the words that are on the sign.)
Comma or Colon?
When introducing a quotation with words like 'He said', 'She whispered', 'It
stated', etc., you can precede the quotation with either a comma or a colon. As a
guide, use commas for quotations that comprise fewer than 7 words and use colons for longer quotations.
Examples:
The prisoner uttered, "Leave me alone."
(fewer than 7 words - use a comma)
The minister shouted: "Do not worry. The next time I stand up here, I will have
answers to these questions."
(7 words or more - use a colon)
Granddad looked at me over the top of his glasses and said, "I've seen it all and
done it all. I just don't remember any of it." 
(more than six words - use a colon)
Comma after the Quotation
There is only a choice between a comma and a colon when the quotation is being introduced. Only a comma can be used after a quotation.
Examples:
Charlie looked over the hedge and shouted: "You can keep half of the
strawberries you pick."
(colon selected)
"You can keep half of the strawberries you pick", shouted Charlie, looking over the
hedge.
(In this example, a colon is not an option.)
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JUST QUOTATION MARKS
Quite often quotations are used without introductions like 'He asked', 'She
yelled', 'They wrote', etc. In these instances, no punctuation is required to introduce the quotation.
 There really is "no place like home".
If this is the, "best skiing resort in France", I would hate to see
the worst.
(should not be a comma after "...is the")
JUST FOR ACTUAL QUOTES
Quotation marks are not used for reported speech. (Reported speech is usually preceded by the word
'that'.) Only use them for actual quotes of speech or writing.
The secretary said, "The phones are dead."
The secretary said that the phones were dead.
(This is an example of reported speech.)
Edmund said that "he was a good boy".
(This is reported speech. Edmund actually
said, "I am a good boy." There should be no quotation marks.)
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DON'T WORRY
The majority of people do not adhere to the guidelines regarding the use of commas and colons with quotations. Nowadays, it is acceptable to introduce a quotation with a comma, a colon or nothing. In modern writing, the choice of punctuation depends largely on the desired flow of the text (i.e.,
how much the writer wants the reader to pause).
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