Today, investing in stocks can be as easy as buying shoes or ordering food. With online platforms making it simple to invest, you can start buying stocks within a few clicks.
The good news is that access to investments is more democratic. Through the internet, you can buy and sell stocks by investing big sums or small amounts of money. That means you don’t need to give up on the stock market just because you don’t have enough money in the bank.
But more important than knowing how much money you want to invest, is learning how to invest it. There are many options out there and, in this article, we’ll help you narrow your choices with some tips to make investing safe for the beginner investor.
Understanding your investor profile and the risks you want to take
When people hear the word risk, they automatically think of giving up because they think they’ll lose lots of money. Although, the stock market brings more risk than some traditional forms of investments, it’s possible to learn how to manage those risk and use strategies, tools and platforms to minimize them.
Remember that planning must be the first step to understand your own reality and to establish goals according to the resources you have right now.
Patience and Knowledge
Learning how to invest in stocks is a good option to increase your income, but you have to be patient. You should invest in stocks only if you feel like leaving your money invested for at least five years. Oscillations tend to be bigger in short term investments, so the longer you invest your money, the lower the risks will be.
How to Minimize Risks
Diversification is the key to minimizing risks, distribute your capital in more than one asset. But that can also be a problem when it comes to only investing small amounts of money since many investments require a minimum.
A usual solution is to invest in stock index funds and ETF’s. Funds are managed by professionals who follow the market daily and adjust the stock selection to maximize profits. They are the best option if you want to invest in stocks minimizing your stock research time for better results.
To begin investing in stocks, you’ll need to open an investment account and as soon as you do it, you’ll have access to several investment options. If you like to take the matters into your own hands, you should prefer a brokerage account.
Online brokerage account
It is the easiest, most practical and less expensive way to operate. A brokerage account allows you to follow your portfolio performance and buy and sell stocks in an effortless way.
Commercial banks offer this option that can be directly connected to your banking account and allow you to receive advice from the bank’s investment specialists. Amongst the most popular brokerage services are Qtrade Investor, Etrade and Merrill Edge.
On the other hand, if you think you’ll need a little help, opening an account through a robo-advisor will be the best option.
This kind of account offers the benefits of stock investing without having to pick individual investments. Once you declare your investment goals, the robo-advisor will provide you with a portfolio designed to meet those goals and will completely manage your investments. Also, as their mission is to use technology to lower costs for investors, that service will cost you around 0.25% of your accounts balance, depending on your choice of the service provider.
Take Full Control of Your Investments
With so many options to choose from, it’s hard to pick where to start. But, either you are a casual investor, beginner or completely new to the stock business, know that the first step is to look for knowledge.
When you feel more confident, open an investment account and stick to the basics. You will find out that this is not as complex as it seems and that you don’t have to be an expert to start investing in the stock market.
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