It’s estimated that just over half of Americans have at least one stock in the market, which might seem alarmingly low when you think about how many companies provide stocks to their employees in the US. However, there has been a huge increase of people getting into the stock market for the first time thanks to technological advances. If you’re one of the many that’s considering trading stocks and establishing a strong financial future, here are some essentials that you need to follow.
While games like Madden or Call of Duty won’t get you prepared for the NFL or international conflict, there are plenty of useful simulators online. When it comes to the stock market, there are plenty at your disposal and the accuracy is only getting better and better. These are completely free to play and you can invest as much virtual money as you want. This will give you a good idea of how the stock market works and what you can expect over the course of a certain amount of time.
4. Know Your Fees
One of the reasons that online trading has taken off like a rocket in the past few years is because of the lack of fees. We’re getting farther from the days where you’d have to pay a fee for every transaction, but there are still some fees that you need to know about. Some of the more common fees when working with a brokerage include trading spreads, mutual fund fees, account fees and assets under management fees. Take these into account before spending more than you have to invest.
3. Invest When You Can
The best time to invest your money is right now. That’s because every day that passes, the money that you have on hand is worth less. It sounds dramatic, but it’s best to place your money into investments so that it appreciates in value over time. Each month, put as much as you can into investing and you’ll be thanking yourself down the road. There are even some debit cards that round up your change and invest them into your portfolio.
2. Don’t Bank on One Stock
One mistake that a lot of people make when getting into the stock market for the first time is not diversifying their portfolio. Thanks to “meme stocks” there are a lot of people doing this (think Gamestop for example). Spread your money around the best that you can when investing for maximum results. Don’t just place your money into different companies in the same field, either. Throw some into tech, some into retail, etc.
1. Stay the Course
More importantly than anything else, you must know that you’re not going to make a quick massive return on your investment then walk away. It’s important to ride the lows and only get out when you really need to. An investment isn’t something to be taken lightly, especially since it’s your financial future on the line. Panic buying and selling is becoming common, and peer pressure does nothing to help that, but it’s going to be advantageous if you can avoid this.