It’s never been easier to invest in the stock market. Plenty of companies have gotten into the mix, releasing applications and programs that have made the process of investing easier than it’s ever been before.
You don’t have to be a financial whiz to learn how to start investing in stocks, though there are some basics you’ll need to familiarize yourself with. Even if you have no experience with investing, a little perusal of the below information should have you ready to hop in and to start making money.
Ready to tackle one of the world’s most prominent money-making institutions? Read on and we’ll get you going.
Getting Started
Not everyone will approach investing in the stock market in the exact same way. This is because not everyone is trying to get the same thing out of the process.
You’ll need to take a moment to sit and think about what you’re attempting to do with your money and the market. Are you trying to build wealth for retirement over many years? Are you trying to make money quickly and build up rapid wealth? Do you just want to build up a little pocket change for a rainy day?
Your goals and the amount of risk you’re willing to take on will play a big role in how you’ll approach getting started with the market. A general rule of thumb to remember is to not invest with any money you might need to survive over the next two to three years.
Even safe stocks can be risky and the market can be volatile. It is possible, though not likely, to lose everything that you put into it. Assess your own personal financial situation and act responsibly.
You’ll also need to steel your nerves and sense of mental preparation. Stocks often fluctuate greatly over short periods of time. For the most part, you’ll want to gear your mind towards long-term results. That means being sure you can ignore the negative feelings associated with dips and falls.
Opening a Brokerage Account
The first thing you’ll need to do when getting into the stock market is opening a brokerage account. There are many online brokers out there and all have different benefits to offer. You can make money with eToro or get signed up with TD Ameritrade, the option is left to you.
It’s best to take some time to shop around between different brokerage companies and find one that you feel most comfortable with. You’ll need to get used to the interface and enjoy the benefits they have to offer you.
It’s also worth noting that almost all basic online stock trading is free via most brokerages. That being said, some do require fees or minimum investment amounts. You should look out for these things and make sure you’re aware of costs you might incur before you sign up anywhere.
Some brokerages also offer robo-advisers. These are automated systems where you can plug in information about your finances and your goals. The robo-advisers will then recommend stock purchases for you.
This can be a great help for beginners who are unsure where to put their money to get the results they want to get.
You could also always look to a professional financial advisor, although this level of care is probably not necessary for someone first getting into stocks.
How Much Money Should You Put In?
One of the major questions first time traders face is how much of their finances they should pour into the stock market. How much is too little and how much is taking on far too big a risk?
Most major brokerages do not require a minimum amount to start a trading account. This is great news because that means a beginner trader can get started with an amount as small as $100. The money you’re likely to get back on such a small investment might not be major, but it can help you get the lay of the land.
The money you get from your investment can then be funneled back into your stock investments and more money can be produced.
Of course, if you have more money to put into your account, it’s a good idea. The more money you put in, the more money you’ll likely to see come out the other side. You can put in as much as is responsible. You’ll need to look at your own personal finances and expenses in order to determine what this amount might be.
To reiterate: it’s never a good idea to put in more money than you could afford to lose.
Selecting Stocks to Invest In
If it was obvious which stocks would be best to invest in, everyone would do it. The uncertainty around stock futures is what makes the market work.
However, there are some steps beginners can take to help ensure they see growth in income during the course of the process. It’s generally a good idea to invest some of your money into blue-chip stocks.
There is a lot of slow but steady growth when it comes to these stocks. They belong to huge companies with long histories, which means their stability is something that most investors can count on. Stocks like Microsoft, Coca-Cola, Starbucks, and so on are generally considered good beginner stocks to invest in.
Many of these companies also offer dividends to their investors, which can help to produce additional income.
The other thing a beginning investor needs to consider is diversification. Picking stocks that operate in different industries can ensure that if one industry is hit by a problem, your entire portfolio won’t sink.
How to Start Investing in Stocks
It’s always a good time to get into the stock market if you haven’t yet attempted to build your wealth in this way. It doesn’t even have to be difficult to learn how to start investing in stocks. With the above information, you can be well on your way in no time.
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