Did you know that, in many parts of the United States, only 1 in 4 Americans invest in the stock market? While some folks may simply prefer to invest in other ways, many individuals are overwhelmed by the process of buying stocks.
For beginners, learning how to invest can be tricky. The diversity of options and the volatility of the market can be enough to scare many prospective investors off.
Luckily, we are here to help. Check out these stock market trading tips to get started building your portfolio.
Learn to Track Stocks
No matter how you decide to invest, you will need to identify a way to track stocks. This way, you will be able to keep tabs on how your investments are doing.
For instance, if you are investing in Waste Management, you can look up WM stock ratings to see when it is a good time to buy or sell. You can even set up text alerts to make it easier to keep tabs.
Choose a Stockbroker
If you want to start trading stocks, you will want to find a stockbroker. A broker will be able to help you open a brokerage account and identify ways to diversify. For the most convenience, you can choose an online stock broker.
Keep in mind that, with many firms, you will need to invest a minimum of $1000. Some brokers will have a much higher minimum, depending on the services they provide.
Direct Stock Purchase Plans
If you prefer to buy stocks directly from a company, you can do so through a Direct Stock Purchase Plan (DSPP). These accounts may also have minimum investments. They are usually lower, however, and range from around $100 to $500.
Some online stock purchase plans have no minimums. Keep in mind, however, that they may have more fees related to your earnings.
If you do not want to go through a broker, but also do not want to purchase individual stocks, then you may want to consider investing in a mutual fund. A mutual fund is a collection of diversified stock holdings that individual investors can buy into. Some investors prefer these accounts because the work of diversifying is already done for them.
What About Fees?
With any of your investment options, you are likely to encounter fees when you begin investing. For instance, if you open an investment account through a brokerage firm, you will likely have to pay commissions. This is a cut that is taken every time you purchase an investment.
With some investment accounts, you will have to pay a Management Expense Ratio for having your account managed. Ultimately, it is up to you to decide what fees you are willing to pay for convenience.
Put These Stock Market Trading Tips to Work Today
With these stock market trading tips, you will soon be on your way to becoming a savvy investor. Before you know it, you’ll be able to take a trip or buy a home with your earnings.
What strategies do you use when buying stocks? Let us know in the comments!