Get Started Investing
Heard about the stock market? Seen stories about the market on television? Want to get involved but not sure how? Many experienced investors once had the same thoughts. From the outside looking in the stock market can seem mysterious, something for the super rich or super smart, but it's not. Get Started Investing is going to help anyone new to investing or curious about investing get into the game of stock investments. To get started investing a potential investor needs three things, capital, a broker, and investment ideas.
There is no investment without money, so that is need number one. Someone looking to invest for the first time doesn't have to be rich to invest, they only need a plan for the money they are currently working with. Saving money until there is enough to open an account and make an investment is normal. It's like saving for a house or a car. So to be an investor, capital is requirement number one.
A broker is your access to the market. There are full service brokers and discount brokers. We'll spend more time looking at discount brokers. But a full service broker is a Merrill Lynch or a Goldman Sachs or even your bank. When working with a full service broker they put together a financial plan for their client, the client gives their broker money to invest and they pray that it all works out. A discount broker allows an investor to access the market for a low commission. Brokers like E-Trade, TD Ameritrade, Scottstrade, and Robinhood to name a few are considered discount brokers. With a discount broker an investor doesn't have a paid professional looking over their account, nor do they have investment ideals backed by millions of dollars of research. A good discount firm will give customers access to research reports and seminars. Others will just give investors a website or phone app to place trades.
For future investors looking for a discount broker there are some things to consider. Some brokers require a minimum deposit to open account others do not. Some have cheaper commission rates than others. Some offer stocks, bonds, options, commodities, IRAs, and other investment tools, while others only offer stocks and options. Also, there is no rule that says an investor can only have one account. An investor can have an account at different brokerages, and it's not hard to leave one for another if the investor is looking for something better. For more information about online brokerages click here.
More than the obtaining the capital and choosing a broker, getting good investment ideas may be the biggest obstacle to overcome as a new investor. A new investor may have a full-time job, or they could be attending school, that doesn't leave a lot of time for investment analysis. The good thing is there is no shortage of investment ideals out there. There are tons of newsletters, tons of blogs, tons of websites dedicated to investment ideas. Many discount brokers offer investment ideals as well. For a new investor all investment ideas, newsletters, and blogs may look the same, but they are not. Some are free while others are paid subscriptions. Some are focused on one specific area of the market like oil, gold, or technology, while others recommend any investment they consider to be undervalued. Some look for growth while others look for value. The stock market offers a lot of options and there is someone out there exploring them and sharing their findings. New investors need to look for investment ideas that they feel comfortable with and that fit their investment plan.
Having an investment plan makes finding investment ideas a lot easier. An investment plan can be as simple as invest in growth stocks only and as complicated as 60% Bonds, 30% stocks, 10% E.T.F.s with the bond allocation broken down to 40% corporate bonds, and 20% municipal bonds, and the stock allocation broken down to 10% growth, 10% dividend, 5% biotech, and 5% on moonshots. Once a plan is in place finding companies or people who are offering information that fits the investment plan is pretty simple.