09
Jul
2021

Investing in Stocks: How to Start for Beginners

Investing in stocks is always a good idea, and investing is a way to set aside money while you are busy with life. You can reward your labor by investing. Investing also means the multiplication of your wealth and a happy ending. The main goal of investing is to put your money to work in a different hope to grow over time. Let us say you have $2000 set aside, and you are ready to enter the world of investment. Maybe only have $100 extra a week, and you like to get into investment. Stocks are a good way to invest that. Whether it’s $2000 or $100, you can always kick start with stocks.

Why stocks? Have you ever wondered? The simple answer to that is investors invest in stocks, and they get the highest potential returns over it. It might be over some time, but it always tends to perform better. There are times it might get Misfortunate, but it will pass.

The stock market was created and made huge wealth over all these years, listing more than 1,000 companies in the US Stock Market alone. Yes, the stock market does not always go up, there are some downs, but everything has its pros and cons. But at most, there is a lot of profit an investor can take home if he knows how to work the market.

The Steps you Could Use to Start Investing in Stocks

Choose your Online Stock Broker

Without a doubt, the best way someone can buy stocks is through an online stockbroker. Opening your fund account through the broker’s website or on the application in a matter of minutes is the easiest step you can take. Other options could be to have a full-service stockbroker buying stock directly from the company, but you know that is a tedious and long process.

Today, we have access to the internet and a lot of reliable platforms and sources you can connect with from where you are no matter what you are doing in a matter of just minutes. Opening your online brokerage account is simple. It is more like setting up your bank account. You complete your registration, get clear with identification, and finish up KYC. And finally, choose whether you want to fund the account by mailing or by transferring funds electronically and yourself to go.

Do your Stock Research

You are new to the stock market, and everything may seem unfamiliar. So, start with brands and companies that you know well as a consumer. Don’t emotionally make moves when you buy a stock. Do you want to choose your favorite brand, and it is a big move to make? Though your first stock is going to be a small amount, you still have to be very cautious about it. The words of Warren Buffet, “buy into a company because you want to own it, not because you want the stocks to go up.”

In order to identify the company’s stocks that you want to buy, you need to get started with a little bit of research. Start by checking the annual report, the history, the Estimation, and more. But still do not fall prey to following the herd. Your search will give you a general narrative of what is exactly happening in that business. Your broker’s website will give you basic analytical tools that you can use to evaluate the business. Most of the online brokers also provide tutorial articles, blogs, how to use that use, and seminars on how to pick the best stocks and you need to make use of it.

Map the Number of Shares you Plan to Buy

You shouldn’t feel pressure when you buy a stock if you don’t feel it’s too small or too little. Buying stock is entirely upon you, so consider starting small and really small. Take this as your practice and every practice brings you much closer to perfection. At least until you master the art of the stock market. You can start with one single share. By owning a share, you know what your risk tolerance is, how you can add to your position over time and if you can go through the Rough patches of the market. As the new stock investor, you might also want to consider fractional shares. Some online brokers allow you to buy a portion of a stock rather than the full share. It means you get into pricy companies like Amazon or Google, they are known for the four-figure share prices with a much smaller investment, so you can start small.

Get the Terms Right

As a newbie to the stock market, you are put off by all those numbers already. But what is going to put you off even more would be the new terminologies. So it is entirely your job to get a hang of it. What is the bid?

  • What is a spread?
  • What is a market order?
  • What is the limit order?

It will take some time until you absorb all of it. It might seem hard in the beginning, but that is not entirely true. It is a matter of time until you will be using it quite frequently. Maybe take a crash course, watch a seminar, it would be good if you can make it your hobby. It will all come in handy.

Set Yourself for the Future Portfolio

As mentioned earlier, your first stock should be chosen carefully. Your first stock should be the first stone to the lifelong investment portfolio in the stock market. It should be more like the beginning of a lifelong journey of investments and returns, at the same time. It can turn out to be a little difficult in the beginning and every investor, even Warren Buffet himself has gone through rough patches.

The key to coming ahead in the stock market long term is giving us perspective and concentrating on the things we can control instead of worrying about the things we cannot control. Once you are familiar with the stock purchasing process and selling when required, you will play an active part in the stock market. Beginning from your first stock, prepare to diversify your portfolio. Do not let stock depreciation and losses stop you from investing, just know that like any other field, the stock market also has two sides to it.

Conclusion

Now that you have begun reading about how to become an investor in the stock market, you have already started your journey. This article gives you an overview of what the market is? And how you can take tiny baby steps towards it. So, be open to what stocks are? When is a good time to start by how you can buy? How much money should you invest in it? And what is your risk margin? Once you have the answer to all of this you can get going to be an active player in the stock market game and at the same time be a successful investor.

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