It has been said that one of the ways people build wealth in America is by investing in the stock market. However, there are only around 50% of Americans who own stocks. This have increase in 2020 because of the global lock-down. Still, one of the reason people shy away from investing. Is because they do not understand how to start investing in stocks.
I am fresh at investing, but I am going to share 4 simple ways how to start investing in stocks. It is not as complicated as many people make it seems. Once you start it become easier. You will ask yourself at some point, “why didn’t I start sooner?” So here are my 4 easy ways how to start investing in stocks.
How to Start investing In Stocks. Buy companies you know, use and love.
I start investing little over a year ago. I start when I saw 2 offers for free stocks I jump on the offer. I remember getting Office Depot and America Airlines stocks. For some reason I thought Office Depot was Home Depot stock. I was excited because I really like Home Depot stock. Until I realize my mistake. I sold both of my free stocks because I was not feeling either company.
So, I start my own research in which company stocks to buy. I took the easiest route. I look around my apartment and how I live my daily life. Write down all the products and services I use and own. I when a little farther and list the companies I like and have good impression about. Then I look at popular companies that I like but not necessary using.
After making my list. I search to see how popular the companies are and if there are future growth. I break my list in 3 sections. Firstly, stocks I am confident buying. Secondly, the ones I need to know a little more about. Thirdly, stocks I label as caution because I see weakness in continuous revenue growth.
From my confident buying list, I pick my first 10 stocks to buy. These are companies I use that are profitable and market leaders. My first was Google, Apple, Microsoft, Home Depot, Amazon, Dell, BMW, Intel, Shopify, and Nokia. I Bought Nokia stock because it was the first branded cellphone I own. This is also from my gut feeling about the company growing in the future.
How to Start Investing in Stocks Use Bit Sizes Method
Trying to figure out what companies to invest in or if you should start investing can become overwhelming. For this reason and others, I think you should always start small. Wet your feet first to test the water temperature. Investing in stocks can be risky. You never know how your investments will turnout. This is another reason to start small and cautiously at the beginning.
You can start with 1, 10 or 100 stocks. Just make sure you are not overwhelmed by the amount. One of the things I did was to buy dollar amount of the stock. This way no matter the price of the stock I still could get a piece of the pie. I start with $10 each for my first 10 stocks.
It honestly takes a little while to feel comfortable doing that. Because I believe there is a psychological advantage about owning a whole stock to owning a slice of a stock. That was something I had to work on mentally. I final realize it is about building and growing financially. So, there is no need to concern myself over the amount I start with. It is best to focus on the finish line instead of the beginning.
How to start investing in stocks. Automate your investments.
In my view one best way to set and forget about your investment is to automate it. I love this feature that Robinwood, Sofi and many others offer. These apps help you to automate your investments. I automate the amount I invest in my individual stock picks each week. It is easy, practical, and fun to watch your stock portfolio growths.
What I have discover by doing this is how quickly its growths. It gives me the flexibility to change the amount and the frequency of money invested. This also give me peace of mind to set it and leave it. Only need to check in if I feel like I need to re-balance my portfolio. Setting up an automated system to invest in stocks help with dollar cost averaging.
Dollar cost averaging is buying dollar amount of stocks no matter the cost per share. Doing so at different times. I am told this can lessen the risk of losing money. However, I do not believe this is always the smartest move. Because sometimes a share price is just too high to practice this method. Also, you are buying stocks to make more money, not less. So, be smart about it.
How to start investing in stocks. Start learning now.
The last of the 4 is mention last intentionally. Because many of us will start learning but will never end up investing. There is not a right or wrong time to start investing. The best time is to start right now. After starting, then you start learning the basics of investing. Learn stock picking fundamentals and basics financials of a company.
There are many ways to learn about the stocks and the stock market. Many YouTube channels, blogs, stockbrokers, and news outlets dedicated time to talk about investing. There are also courses you could take that will teach you all about the world of finance. What I will say is that the best teacher is experience. Learn from doing.
Listen and learn with wisdom, invest with caution. Not everything you hear will be of value. Neither will all information motivated from a good and pure place. Some things are all hype, some are financially motivated, and others are click baits. Learn to be savvy about your money. Noting is wrong with counting all your pennies. It is your money, you work for it, be involved with how you invest it.
How to start investing in stocks. This is a Wrap Savvy Dimers.
Have you been wanting to start investing in stocks? Are you waiting for the right time because everything looks uncertain? You maybe thinking this is all too complicated. Maybe you are thinking it is too hard to pick the right stocks. All of these might be valid base on your unique situation.
However, one thing is certain the longer you make excuses. The longer it will take you to get started. The best thing is to start right now. There are multiples of companies that will give you free stocks or money to start with. This might be small rewards to start. However, it is a motivating action that will get you excited about investing.
Do you have any thoughts on how beginners can easily start investing in stocks? I would love to hear your perspective. Please continue the conversation in the comments below. I would appreciate if you like and share this content. Thanks for reading. Have a great day. Remember “Greatness is in you; all it need is to be connected to the impossible.”
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