Investing in stocks is a fantastic way to grow your wealth and set yourself up for a fantastic future. The question for most people is “How do I get started?” Thanks to the growth of the online world, the stock market is now more accessible than ever. In fact, you don’t even need to use a broker if you don’t want to – with the right knowledge, you can manage your own stocks online. Of course, there is a little more to stock trading than simply reading up on the latest StockTwits review, and making sure that you keep track of movements in the marketplace. Here’s your quick starter guide to stocks.
Choose your Investment Style
There are plenty of different ways to approach your stock investment strategy. For instance, if you’re the kind of person that likes to do things themselves, then you can basically do everything on your own with a self-managed trading account online. All you need is an online stock strategy to get started. On the other hand, if you know a little bit about stocks, but not enough that you feel comfortable trading on your own, you can always get someone else to handle the complicated parts for you. An advisor or stock broker not only guides you through the process of investment – but they can also give you advice on which assets are best for you.
Know the Difference Between Stocks and Mutual Funds
If you do decide to take the DIY approach to stocks and investing, then don’t worry. As complicated as the market might seem, you’ll find yourself getting the hang of things in no time. The first thing you’ll need to know, however, is the difference between stocks, and mutual funds. A standard stock or mutual fund allows you to purchase a small piece of many forms of stock within one transaction. ETFs and Index funds are the kind of mutual funds that track indexes, like the S&P 500 fund for instance. When you invest in a mutual fund, you also own small amounts of each company in that fund. Mutual funds are a great way to build a diverse portfolio. On the other hand, if you’re interested in a certain company, you can buy multiple shares or a single share in that individual stock.
Set your Budget and Invest
Finally, decide how much money you’re going to invest. The amount of cash you’ll need to start investing will depend on the kind of shares you want to get your hands on. Stock prices can range from a couple of dollars a share to thousands of dollars per share. It’s important to check your options carefully before you invest. In terms of how much you should invest, it’s important to make sure that you don’t go over the top with your trading – particularly when you’re just getting started. Begin working on your portfolio slowly and build up over time, making sure to diversify as you go. As your knowledge and personal strategy develops, you’ll get a good insight into how much you can afford to invest each month.