Investing In the stock market is fun, rewarding, a bit stressful makes you smarter, and also risky. It gives us all the high we get from practicing extreme sports. Pardon our sense of Foreboding, The stock market has made quite a number of millionaires, we have seen many Hollywood representations of a young man with airy dreams goes to wall street clad in a suit, frantically works hard and becomes a millionaire after (cc: Leonardo DiCaprio). But Jokes apart, Investing in the stock market is quite beneficial especially if you’re after long-term returns, regardless of market volatility, you can still make a “considerable buck” off stocks. While you’ve heard several exciting and scary stories about the stock market which might have shaped your opinion on stocks, this blog post is to ensure you learn lessons first before buying stock and not the other way around.
The Stock market
According to Investopedia, The stock market is the collection of markets and exchanges where regular activities of buying, selling, and issuance of shares of publicly-held companies take place. Simply put, the stock market provides you the opportunities to trade your interests in public companies.
You make profit by “forecasting” based on business trends on which company is likely to decrease or increase in value and based on such information you can decide to sell your shares or buy shares(it’s more fun and a bit complex than this).
Gathering information is critical in your stock-investing pursuits. There are two times to gather information on your stock picks i.e. the companies you’re investing in: before you invest and after. You obviously should become more informed before you invest your first dollar. But you also need to stay informed about what’s happening to the company whose stock you are buying and also about the industry and the general economy.
How To Invest
In our previous blog post, we talk about how to identify opportunities and we feel you can gain a thing or two from reading that. So now that you have a firm grasp of what the stock market is and how it works, we’d be discussing how to invest in stocks. How do you get started:
- Plan and Protect Yourself: This might sound a bit generic but don’t just invest in stocks for the fun of it or due to peer pressure. Invest with a plan, define how investing affects your financial goals in the long and short term. Are you investing with an eye for retirement or will you reinvest your earnings or withdraw it. Also, put some money aside to insure yourself and your future from any risks
- Decide the kind of Investor you want to be: Decide if you want to manage the investment process yourself i.e. a more hands-on approach that entails you buying and choosing the stocks yourself or you want to outsource the process to a brokerage firm which helps you invest based on outlined goals.
- Stocks or Mutual Funds: If you’d be managing your investments in the stock market by yourself, you should know the difference between stocks and mutual funds. With mutual funds, you are able to buy different small pieces of stocks while individual stocks are shares of a specific company. It’s advised that you build a diversified stock portfolio of different companies.
- Manage Your Portfolio: Review the stocks and mutual funds in your portfolio to ensure they are in line with your investing goals.
At needtoskip we are eager to help you make financial gain and are ready to support your investing efforts in real estate.