You don’t need a huge income or tons of spare cash to start investing in stocks.
All you need is the right attitude, and a basic understanding of the market. Over the years, countless financial experts have proven that investing in stocks and shares is a fantastic way to grow wealth and tap into new money-making opportunities. However, if you’ve never been involved in the stock market before, then it’s difficult to know how to get started.
Here, we’ve put together a few quick tips to get you investing in no time!
Step 1: Decide How You’re Going to Invest
There’s no one-size-fits-all strategy to investing in stocks. Some people take the simple approach and work with a broker to get the most out of their money. If you don’t know much about the stock market and you feel uncomfortable doing all of your research yourself, then a professional financial advisor or robot advisor might be a must-have for your investment campaign.
On the other hand, if you’re the DIY type who prefers to do everything from scratch, you might decide that all you need is an online broker account to get started. You’ll also need to make some other decisions about your investing plan too. For instance, are you going to use your own cash, or even a loan to invest? What does your risk level look like, and how much can you afford to lose? Are you going to invest every day, or just now and again?
Step 2: Find your Investing Account
Once you’ve decided on how you’re going to invest, the next step is to create an account with a brokerage. You’ll need an account no matter what kind of strategy you’re thinking of using. These accounts are how you send orders to buy or sell stocks in the exchange. If you decided that you want to do everything yourself, then all you need is a basic online brokerage account. You’ll be managing this interface yourself, and using it to choose the stocks and shares you want to invest in.
If you’d like to take a more passive approach to investing, then you could consider using a robotic advisor instead. Robo-advisors are a more recent addition to the stock market, specifically designed for people who need a little help getting the most out of their money. Although you pay a little extra for the guidance, it’s well worth it if you’re a beginner and you want to make sure that you’re putting your money to good use.
Step 3: Know What Kind of Stocks to Invest in
If you’re taking the DIY route and choosing stocks for yourself, then you’ll need to know the difference between stock mutual funds, and individual stocks. Mutual funds, or exchange-traded funds are the options that allow you to buy pieces of a lot of different stocks at once, using just one transaction. This allows you to diversify your portfolio, even if you only have a small budget to work with. However, it’s worth noting that mutual funds aren’t as likely to earn you a lot of money at a rapid pace as individual stocks are.
On the other hand, individual stocks allow you to get your own piece of a specific company. You can buy shares or a few shares of a specific brand as a way of testing the stock market waters for the first time. Ideally, you’ll want to buy a lot of different kinds of stocks in the long-term to create a diversified portfolio. However, this can take more time and money if you’re buying one individual stock at a time. The benefit of mutual funds is that they’re already diversified.
Step 4: Get Investing!
Once you’ve got your trading account, you know what your strategy looks like, and you have an idea of the kind of stocks you’re going to be investing, the next step is to start investing. Stock investing isn’t something that you’re going to become an expert in overnight. It takes time and focus to create a portfolio that’s going to earn you a lot of money in the long term. However, if you commit to gradually developing your skills and paying attention to the stock market, you’d be surprised by how much you can earn.
Even if you’re only investing money passively with the help of a broker, investing is often much better for your money in the long-term than simply leaving your cash sitting in a bank account to stagnate.