People often feel intimidated by the idea of investing in stocks. However, it is a lot easier than you might expect. You need to set up an online account with a brokerage, and then you can get started. When you buy stocks, you are purchasing shares of ownership in a public company. Your goal is for the company to become more valuable so that you can sell your stock for a profit down the road. Take a look at how to get started investing in stocks.
- Decide How Involved You Want to Be
The first step is to decide whether you want to choose your stocks and purchase them, or you want an experienced broker to do it for you. Most brokerage firms offer you different options, including investing in your 401(k). Most beginners start out by contributing to their 401(k) retirement funds, and they take the time to learn about stocks.
- Choose the Best Investment Account
Next, you need to choose the type of investing account that is best for you. If you want to be hands on, you might want a brokerage account. People who are looking for help might open an account with a robo-advisor. When you open your account, you can choose an IRA account, a tax brokerage account, and more.
If you choose a robo-advisor, you won’t have to choose investments, as they will manage it for you. They will discuss your investing goals, and they will invest on your behalf.
- Learn About Different Investments
When you invest in the stock market, people are looking at two products. The first is individual stocks, where you choose the company you are interested in and buy shares of their stock. The other is stock mutual funds or exchange traded funds. In this kind of transaction, you will purchase small parts of different stocks, and put them together in your portfolio.
- Set Your Budget
You need to set a budget, and start by choosing how much you want to invest. If you have a smaller budget, you might want to go with EFTs, which are exchange traded funds. Mutual funds may have minimums of $1,000 or more, but EFTs trade the ways stocks do, so you can purchase them for a price. Once you set your budget, you are ready to start investing.