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How Do You Invest In Stock market ?

However, there’s so much more to successful investing than what we see portrayed in movies and on TV. Everyone from seasoned professionals to self-proclaimed newbies can get involved in making financial investments in a variety of ways.

Creating an emergency fund, retiring, buying a home, having a child are all wonderful financial goals but you need to be prepared financially. By creating a simple investing strategy you can make sure you and your money are on the same path for your future long-term goals.

Let’s take a look today at some of the best ways new investors can invest their number in some of the more common investment types so you can start investing.

Hold off on your parent’s basement apartment…for now.

Investing in the stock market

Through the stock market, many people have managed to secure returns that are exponentially greater than the amount they would be able to get from putting their money into a savings account.

Check out this killer chart from Best Market to illustrate this point of letting money sit in a savings account versus putting it in safe stocks:how-to-invest-money-savings-vs-investingNow, the stock market is notorious for its ups and downs—and its inevitable bear market.

Nope, not nearly as cool as it sounds. A bear market simply means a prolonged down stock market, one where investors can lose a chunk of value in their holdings.

Although you may be hesitant to invest in the stock market for fear of losing your hard-earned money, the odds are actually on your side. While we’ve all heard stories of people who have lost it all on the stock market, these individuals often sustain losses because of risky investment choices that simply do not pan out. It’s far from the norm.

When you choose to invest in the stock market, you don’t have to assume risk to maximize your returns. Instead, simply keep your head down and aim for average and think about the longer-term.

Pro

The stock market grows by about 7 percent annually, so all you have to do is make sensible investments and avoid unnecessary risks.

At a 7 percent annual rate of growth, you will double your investment in just 10 years. You’d never see that return from a typical savings account. Ok, are you on board?

When getting started investing, education is key. One of the best education and investing tools for the stock market is Betterment.

Con

Perhaps the most significant disadvantage of investing in the stock market is the fact that it is unpredictable.

And, as you see the value in your holdings drop, it’s hard not to slam that sell button to cut your losses. As Warren Buffet, and my future Grandpa (I haven’t asked him yet, but as soon as I get the chance), always says:

“Unless you can watch your stock holdings decline by 50% without becoming panic-stricken, you should not be in the stock market”

A stock that is on the rise one day, could always tank the next. The key is to ride the wave and weather market fluctuations. The stock market is not a short-term game.

Creating your portfolio

As a first-time investor, you don’t want to go ahead and choose individual stocks. Your first course of action will be to an online broker, brokerage firm, robo-advisor to help you sell and buy stocks.

Different brokers have varying requirements when it comes to opening accounts, so it’s a good idea to search around until you find one who is a good fit for your investment goals.

Financial advisors usually set a minimum account balance to open your brokerage account, which may range anywhere from $500 to $10,000 or more.

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