Hot Features
Premium
Register for real-time alerts, custom portfolio, and market movers
Investing in stocks is a great way to put your money to work so that you can reap the rewards in the future. As a beginner it may sound scary and confusing, but you should remember that everyone who has ever started investing in stocks was once in your shoes too.
The good news is that getting started is really not as difficult as it appears to be. In fact you can find out exactly what you need to do right here, and right now.
1. Choose How You Want to Invest
Do you know what kind of investor you want to be? It may sound surprising but there are actually several different ways that you can approach investing in stocks.
Some of the more popular options that you could choose from include:
- Online discount brokers that will allow you to choose the stocks that you want to invest in for yourself. Some may provide helpful resources and general tips, but largely you’ll be left to your own devices.
- Full-service brokers are traditional stockbrokers that will actually help you to plan out your investment strategy and provide advice. However the fees they charge are normally significantly higher.
- Robo-advisors are a low-cost option if you want to automate the process and have your stocks managed on your behalf. In most cases you will be able to define your own goals, but the selection of the stocks that you buy or sell will be automated.
In short you need to decide whether you want to be in the driving seat, or would rather adopt a more passive approach. Based on that choice, you can then find the right type of broker.
2. Select a Broker and Start an Investment Account
Aside from the type of broker that you need to choose, there are other factors that you should consider as well. The most important factors that you should look at when selecting a broker are the:
- Account minimums that need to be deposited in order to open an investment account. Some brokers may have no minimum, but others may require a deposit of up to $1,000 or more.
- Commissions and fees that can include commissions on individual trades, monthly fees, or even withdrawal fees.
- Deposit or withdrawal options that can encompass bank transfers, credit card, Paypal, or other options.
- Types of trades and whether the broker allows you to purchase not only individual stocks but options, CFDs, bonds, mutual funds, ETFs, and other investments.
- Promotions that are available and may help you to acquire a number of commission-free trades, deposit bonuses, or other deals.
- Ratings and reviews for the broker to make sure that you select one that is reputable and has a good track record in terms of reliability and security.
Once you have selected a broker you can go ahead and open up an account. The process for opening an account is normally fairly straightforward, but some brokers may require an immediate deposit.
Additionally some identity verification may be necessary as well, in other to comply with local laws or regulations.
3. Learn More About Stocks
If you’re using a robo-advisor, full-service broker or some other automated service, you can technically skip this step if you want. However if you are not you should definitely take the time learn more about stocks before you invest any of your hard-earned money.
In particular you’ll want to focus on several key areas such as:
- How to research stocks
Ideally you should try to understand more about how you can look up information about the stocks that you invest in. That normally encompasses the company’s financial reports, recent news, and other information.
Needless to say you should familiarize yourself with share price graphs, such as the Vitrex share price. It can be useful to help you spot trends.
- Types of stocks that you want to buy
Aside from individual stocks there are a lot of other things that you can invest in, including mutual funds, bonds, and so on. Each is slightly different and has different risks and potential profits – so it helps to know your options.
- Types of orders that can be placed
When you buy or sell stocks you can place different types of orders. Although there are many different types of orders, the four most common that you need to know about are market orders, limit orders, stop orders, and buy stop orders.
- How to decide on the best time to buy, sell, or hold onto stocks
In order to successfully profit from your investment, you need to know when the best time is to buy stocks, sell them, or hold onto them. At times you may want to make the decision based on the share price alone, but in other cases it may be a new product launch, financial report, or other data that influences your decision.
The more that you learn about stocks and investing in them, the better off you’ll be. It should be noted that even if you are using a robo-advisor or full-service broker it doesn’t hurt to be familiar with your investments.
4. Start Buying Stocks
If and when you’re confident in the basics of investing in stocks – go ahead and buy some. Initially you may want to adopt a safer approach, and start small by buying a few shares so that you don’t invest too much of your capital in one go.
At first you should use market orders and limit orders to buy stock and sell them – which is what the majority of traders generally do. After you’ve learned the ropes, you can move on to other types of orders if you feel the need.
5. Invest More, Plan, Diversify, and Learn
At this point you should already know what you need to in order to get started and actually invest in stocks. Subsequently it is really just a case of continuing to invest and coming up with a strategy that you feel fits your requirements.
In the long term you should try to diversify the types of stocks that you invest in. Simply put it is best not to put all of your eggs in one basket, and the more you spread out your investments – the less risk will be involved.
Aside from that you should try to make it a point to continue to learn more stocks so that you can keep up to date and invest more effectively. To be entirely honest this is something that you’ll want to continue to do – regardless of how experienced you may eventually become.
