This blog is the second installment of a new Stocks for the Week series called The Beginvestor, catered specifically for people who are new to the investing world and want to understand the ins and outs of the market. The Beginvestor is written by Danielle Bilbruck, a novice investor herself, who will be covering her own investing education in detail as she goes and documenting it for this series.
After the first installment of The Beginvestor, we have a handle on basic investing vernacular. So what’s next? There’s no better way to get started with investing than to simply jump right in: Let’s get started with the market!
- Determine the method you’d like to use for investing. Do you want to go it alone or work with a broker? If you would like access to a professional who can give you advice on buying, selling, or types of stocks, an insurance broker is a good way to go, though you will pay for that person to manage your investments. You don’t necessarily need to meet with anyone to get started; you can simply check out places like E-Trade or TD Ameritrade to begin. If you are ready to jump in and test the waters alone, there are a variety of apps you can use online to purchase your first stock. I’ve written a piece on the differences, ups, and downs of brokerages versus stock apps here.
- Think about an industry you feel confident in. If you’re going to pick stocks to invest in, you should know a little bit about the industry and how the industry (and the company) is doing. It’s important that you feel confident, knowledgeable, and/or passionate about the industry and company because you’re buying part of it! You will hopefully be monitoring the company by reading different articles about them and you’ll want to understand more about what they do and how they do it…so you’ll definitely want to be interested in the industry. This will give you better insight into buying or selling in terms of volume or frequency.
- Identify a company and start gathering data. Once you find a company you’d like to invest in, it’s time to do some research. You’ll want to know how much the stock costs and whether it’s in your budget, what the forecast for that stock looks like, and if there’s been any news on them recently that might affect prices positively or negatively. You can always look on the major market indexes to find pricing information and forecasting. Our Stocks for the Week Investor app will also provide safety scores for different sectors or companies; you will be able to get recommendations on whether a particular stock is a good buy and whether you should buy or hold off.
- Buy your stock! Once you’ve done the research and feel good about the stock you’ve picked, it’s time to pull the trigger and make it happen. Tools like Acorns or Robinhood are excellent for beginners and can walk you through exactly what you need, and a brokerage will be able to make the purchase for you.
Congratulations! You are now officially an investor. Of course, while it’s simple to purchase stock for your portfolio, we also need to learn about monitoring that purchase, about the different industries and sectors, when to sell or when to buy more, and how to put together lists of additional companies and sectors to begin investing in. We’re not going anywhere; The Beginvestor series is all about walking through it with you. In our next blog, I’ll cover my own first stock purchase in detail and we’ll put together a watchlist in the Investor app!