Investing in stocks is an excellent way to make money. Stocks are a good investment for long term investors, even during periods of market volatility. Investors can buy individual stocks or stock mutual funds, or get help by Robo-advisers for investing in stocks. How to get started investing in stocks? Follow the below steps to know how to start investing in the stock market.
Decide How You Want to Invest in Stocks
There are several ways to invest in stocks. Choose the option below that represents how to invest :
“I’m the DIY type and am interested in choosing stocks for myself.” This means you already know the stock buying game and need a brokerage account to start. “I know stocks are a great investment and need someone to manage the process for me.” You can have a Robo-advisor which is a low-cost investment management. Once you decide which preference you want, you are ready to shop for your stocks.
Open an Investing Account
To invest in stocks, you need an investment account – a brokerage account. Opening an account through a Robo-advisor makes your work easier. But both broker and Robo-advisor allow you to open an account with a little amount.
The DIY option – Opening a brokerage account: An online brokerage account offers you quick and easy access to open an account and the least expensive path to buy stocks, stock funds, or other variety of investments. The broker will also help you open a retirement account (IRA account).
The passive option – Opening a Robo-advisor account: A Robo-advisor offers the benefits of stock investing and provides the complete service of investment management. It will ask you about your investment goals and builds a portfolio to achieve your aims. It may sound expensive, but the management fees are similar to what human advisor management would charge.
Difference Between Stocks and Stock mutual funds
You can choose these two types of among the stock market investment:
Stock mutual funds or exchange-traded funds: You can buy small pieces of many different stocks by these mutual funds. You can own small pieces of stocks, and put several funds together to build a diversified portfolio.
Individual stocks: You can buy a single share or a few shares in a particular company. You can build a diversified portfolio out of many individual stocks, but it takes significant investment.
Set a budget for your stock investment
If you’re a beginner, you often have two questions in your mind:
- How much money do I need to start investing in stocks? The amount of money you need to invest in buying stocks depends on how expensive the share is.
- How much money should I invest in stocks? If you’re investing in long-term fund investments, you can allocate a large portion of your portfolio.
Start Investing in Stocks
Stock investment is filled with complicated strategies and approaches, and the most successful investors have done a little more than stick with their basics. Choose individual stocks only if you believe the company’s potential for long-term growth. If you choose to invest in individual stocks, learn to research stocks for worth in time. But if you stick with fund plans, build a simple portfolio with low-cost goal option.
