Many wealthy people have vouched the importance of investing and saving. Today you get an opportunity to be informed in a way that will bring you one step closer to investing successfully. However, in order to understand stocks fully do further research. There is simply no way around it, if you are planning to be successful long term. On the other hand, I have noted for you a brief understanding of getting started with stocks. You’re probably like me and want to learn quick and get started even faster so here’s my advice.
Choosing a stock
First, I suggest picking stocks one of three ways. Pick a company you like to associate with (brand name, clothing, food, cars, etc.) Secondly, pick a company you know makes money. Lastly, you may pick a company that stands out in the news right now. Make these the first couple of stocks you are watching. Why? because you are already familiar with who they are and it decreases the amount of historical research you have to do about the company and its profits.
Buy low Sell high
My three are Amazon, Disney, and Exxon. I originally purchased Exxon at $40.00 per share. Basic economics says prices will eventually go up. So a few days later I had the option to sale the stock for a little profit. As you can see the major key is to buy low and sell high. Company’s with old money stock prices have an almost consistent pattern of going up and down. For instance, a stock of drops to around $25 but raises to $80. Holdout a bit longer If I want to double the profits. Investors often try to find cheaper stock and buy thousands of shares because they know that realistically a stock price doesn’t change for that many dollars at a time, but in a volatile market anything may happen.
Example: Exxon was purchased at $40 but now its value is $46. I just gained $6 per share. If I originally purchase 1000 shares. I now make a profit of $6000.
Various factors effect stock prices so its important for you to pay attention to the news, company announcements, and previous history. Two other great examples are Tmobile buying sprint or Disney announcing its movie platform in partnership with ESPN. These are almost guarantees for future profit.
What kind of investor will you be?
There are several different kinds of traders, but the most common discussed today are day trader, swing trader, or long term trader. Become a long term investor if you want the benefits of receiving dividends (yield). This is cash paid to you simply for holding the stock. Day traders and swing traders are more short term traders who are just waiting on a quick profit then cash out. I encourage you to research the risk reward of each type of investing.
How to get started
Fortunately, there are multiple platforms you can use to invest. Some platforms allow you to buy fractional stocks. Fractional stocks permit you to buy a portion of a stock. Amazon stock is currently priced at $2421.86 and its price is dropping. You can buy $200 of Amazon which is about 12% of the stock. When the stock price goes back up so will your investment. In conclusion, consider using platforms like Stash or Robinhood to get started. These platforms will also give you a free stock for getting started.
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