Investing in the stock market can be intimidating for newbies. The last thing most people want is to put their hard-earned money into something they know nothing (or very little) about. Questions such as how to invest, where to invest, and how much to invest can make the process seem complicated. Though it can be risky, investing in the stock market has the potential to give your finances a substantial boost.
After you pay your bills, put money on your Kaiku Card, and save a certain percentage of your income, you can dip your toes in the investment arena with any extra income you have. Here are some tips to help you feel comfortable in doing so:
1. Determine how much money you feel comfortable investing. If you plan to invest in mutual funds or an index fund, there may be a $1,000 minimum. Similarly, going through an online broker to invest in individual stocks may have minimums for getting started. If you do not have the money required to start, set a goal for saving the specific amount by reallocating items in your overall budget.
2. Determine which method you will use to invest. There are various online brokerages you can select as your vehicle for buying and selling stocks. If you want a more hands-on experience, find a commissioned broker in your area. Just be aware that brokers tend to have higher fees and a higher minimum requirement for investments.
3. What kind of portfolio do you want? Financial experts tend to have various opinions on the best method of investing. Some recommend investing in what you know, while others advocate diversifying your portfolio with a mix of industries and risk categories. Whether you want to invest solely in one stock, a combination of stocks, mutual funds, or bonds, doing some research ahead of time is key.