Investing in stock markets has become quite the hot topic as of late. Many companies are trying to attract the attention of younger people and help them build up resources from a young age. This is wonderful, but it is normal to be nervous about investing your money for the first time. There is always that lingering thought that you might lose more than you might eventually make. This article will give you some tips to set you at ease and help you invest your money smartly.
1. Decide how you want to go about it
If you are confident in your stock marketing skills and feel like you can buy and manage your own stocks, then you can do this on your own. If you do not feel comfortable with this option, you can let someone else manage your stocks and make those tough decisions for you instead. A robo-adviser might then be the solution for you. The costs are very low, and they take your specific needs into consideration.
2. Open an investing account
This is going to take a little bit of research. Make sure that you select a company that is trustworthy so read up about them online and make sure to look out for scams. Many companies that have been here for years are safe to buy stocks from and are quite popular. Some banks also allow you to invest in stocks through them. Make sure you select an account with a minimum monthly amount that you are comfortable with. If you are a student for example and only want to invest $20 per month you will have to select an account that will allow you to do this. If you are looking for an account to invest large sums in, make sure you can invest such large amounts each month. Also, decide if you do wish to invest monthly. Some people invest yearly (one large lump sum) or buy stocks daily. Monthly is the most common one and we would recommend this one to anyone just starting out.
3. Stock mutual funds or exchange-traded funds (ETFs)
This is a great idea for any first-time investor or someone who is not planning on investing large amounts of money on stocks each month, like a student. ETFs track an index which contain some of the best companies out there. You then buy small pieces from each company every month. It is very easy to do and well worth it.
4. Set a budget
Decide on a monthly amount that you are comfortable investing in stocks every month. You can set it so that this amount is automatically invested on the same day of every month. Make sure that you are not spending too much on investing. You must still be able to generate savings, pay off debts, and pay for day to day expenses comfortably.
The most important thing with investments is to be patient with it. There will be times when the stock market is down and your stocks will look very tragic, but do not sell, just hold on, it will get better again. With stocks, it is also much better to invest for a longer period of time so perhaps aim for 10-15 years instead of investing for one year.
6. Bite the bullet
There comes a time when you must just jump in with both feet and start investing. Do not delay this process for too long because you are feeling nervous. Every year that goes by is a potential year of money that could have been made.