About eight years ago, I was asking this myself. I wanted to invest in the stock market but just did not where and how to begin. With all the buzz words around, it is easy to get puzzled. With 24*7 news channel speaking of Armageddon every day, it is easier to get scarred as well. However, stocks by far offer the best returns than any other investment considering the initial investment.
The beauty about investing in the stock market that you can begin with as little as $100. You don't have to be a PhD. in finance to make money in the stock market. Yes, the market will go up and down but if you choose your investments wisely, you should be just fine.
The fact is that media makes more money putting a grim picture as more people tend to watch the news. But the news channels over blow the issue by talking about it day in day out like debt ceiling and European debt fears. When we hear the same bad stories over and over again, we tend to believe in it.
So, consider stock market an investment option just like fixed deposits, investment property, gold etc.
In order to begin investing in stock market, the first thing you need to do is open a Brokerage Account. There are numerous firms that you can look at like Fidelity, Scottrade, Etrade, Bank of America etc.
Once the account is opened, start funding your brokerage account. You may choose to transfer every week, every month or every quarter or whatever frequency you like but invest only the amount you can afford to loose. In order words, if you were to loose every penny in your brokerage account that should not affect your day-to-day expenses. INVEST not GAMBLE
Options are a wonderful investing tool. You can follow the below link to learn the basics on options.
http://www.cboe.com/LearnCenter/Tutorials.aspx
Some investment strategies for beginners
The beauty about investing in the stock market that you can begin with as little as $100. You don't have to be a PhD. in finance to make money in the stock market. Yes, the market will go up and down but if you choose your investments wisely, you should be just fine.
It was just three years ago in Oct-Nov 2008 when it looked like the 'End of World' is near. Dow Jones was down to low 6k and S&P 500 index was down to 660.
Instead of getting scared of these time, don't you wish you had bought GOOGLE then at $250 or APPLE at $78 or CHIPOTLE at $40. There are so many great names that were trading at unbelievable discount. Don't we go shopping at such huge discounts.
The fact is that media makes more money putting a grim picture as more people tend to watch the news. But the news channels over blow the issue by talking about it day in day out like debt ceiling and European debt fears. When we hear the same bad stories over and over again, we tend to believe in it.
So, consider stock market an investment option just like fixed deposits, investment property, gold etc.
In order to begin investing in stock market, the first thing you need to do is open a Brokerage Account. There are numerous firms that you can look at like Fidelity, Scottrade, Etrade, Bank of America etc.
Once the account is opened, start funding your brokerage account. You may choose to transfer every week, every month or every quarter or whatever frequency you like but invest only the amount you can afford to loose. In order words, if you were to loose every penny in your brokerage account that should not affect your day-to-day expenses. INVEST not GAMBLE
Options are a wonderful investing tool. You can follow the below link to learn the basics on options.
http://www.cboe.com/LearnCenter/Tutorials.aspx
Some investment strategies for beginners
- Invest no more than 60% of your funds at any time. For example, if you have $10,000 in your account, invest $6000. Keep the remaining $4000 for times like Oct 2008 or Mar 2009 or May 2011 when the market undergoes deep correction.
- Have no more than 3-4 equities in your account at any time. It is very difficult to track news on your portfolio if you have more equities.
- Be diversified. For e.g, Technology sector, Materials, Finance etc. You should never have all the equities in your portfolio from the same sector
- Buy the share of the best companies in their field. Even if the big names like google, apple, J P Morgan, Mastercard go down with the market, they recover quicker than others. You are less likely to incur huge losses.
- Set your targets with every trade. Before placing a trade, you should have a target for entering and exiting both on the up and the down side.
Hey nice article crisp and clear
ReplyDeleteBefore today I did not know about Investing in stock, but now after reading from here it is feeling easy to invest in stocks without any hesitation, thanks for sharing.
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