Investing might be one of those topics you’ve shied away from because it’s all too intimidating. Heck, finding the definition of “stock” is enough to send you into a fit of sweat.
But investing doesn’t have to be that complicated, especially when you’re just starting out. Plus, you’ll learn as you go.
If you’re looking for just the essentials, here’s our quick and easy guide to investing in the stock market.
3 Ways to Invest in the Stock Market
We told you we’re going to make this painless, so we’ll show you exactly how to invest in the stock market.
1. Beginner: Exchange-Traded Funds (ETFs)
What it is: A basket of investments (such as stocks and bonds) that trades on the stock exchange.
Main perks:
- The ability to invest in big names without buying whole stocks — honestly, who can afford an $1,800 share of Amazon stock?!
- Tend to hold less risk, since you’re not investing in whole stocks (you’re not putting all your eggs in one basket, so to say).
Heads up: Won’t necessarily help you retire early, but a great option for beginners.
How to start investing: Look for apps that allow you to invest in ETFs at low to no cost, like Acorns, which will round up your purchases and invest the spare change into the stock market for you. The app is $1 a month for balances under $1 million, and you’ll get a $5 bonus when you sign up.
2. Intermediate: Mutual Funds
What it is: A combination of stocks, bonds and other investments. Basically, your money gets pooled with other people’s money, which goes toward buying larger company shares. If you have a 401(k), there’s a chance you invest in mutual funds already.
Main Perks:
- A way to diversify your investments. If a particular stock crashes, you’re not totally out of luck.
- Experts manage mutual funds, though that means you can’t control your portfolio.
Heads up: Typically require higher minimum investments; cannot be traded like ETFs and stocks; be aware of fees and expenses.
How to start investing: Purchase mutual funds through a mutual fund company, bank or brokerage firm (like Ally Invest and Fidelity Investments).
3. Expert: Individual Stocks
What it is: An investment that indicates you own a share of a company (e.g. Apple, Netflix or Amazon).
Main Perks:
- Potential to earn big money. Think: If I’d only bought Apple stock for $22 a share back in 1980… it’s now worth nearly $220 a share…
Heads up: This is the riskiest option on this list. The value of stock hinges on a company’s performance. If everyone boycotts Apple tomorrow, your stock could drop in value, causing you to lose a lot of money. Not recommended for beginners.
How to start investing: Consult with a brokerage firm or online brokerage.
Got the basics down? Go ahead and start dabbling. Investing in ETFs through an app like Acorns is a great, gentle way to launch your investing career. Then you’ll be off!
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
source The Penny Hoarder https://ift.tt/2V0d8aC
ليست هناك تعليقات:
إرسال تعليق