Your Guide To Learning To Invest In Stocks

If you’re sitting on some money and you want to turn it into more, then you should consider stock trading. While things like real estate are often the go-to investment option for most people, mortgage rates are sky high these days, making investing in real estate inaccessible to many.

If, on the other hand, you choose to invest in the stock market, you can do so even if you don’t have the biggest investment to make. Who knows how much you might end up with if you do! With the Dow Jones average return on investment over ten years being 15.03%, you could make a pretty penny if you play your cards right.

What’s your approach?

When it comes to making your first foray into the thrilling world of buying stocks and learning when to sell stocks, you’ll need to have a well-thought-out approach in mind.

With different investing strategies available to you, you must learn stock market basics so you know how best to invest your money. For example, before you start investing, it’s a good idea to think about whether you want to buy into individual stocks or funds.

Individual stocks

When you think of investing in stocks, you probably think primarily of buying shares of companies as an individual investor. However, for someone who is just about to begin investing, this is only advisable if you do constant research into which stocks are the safest and most worthwhile for you to invest money into.

Online short courses in stock trading are a great way to learn all about how individual stocks work and what to look out for in good stock investment.

Exchange-Traded Funds

Also known as a mutual fund, index funds, and fund ETFs, exchange traded funds (ETFs) are a great way to break into the money market. Basically, ETFs offer a great way for you to invest in several worthwhile stocks at once, because each one of your investments will be managed for you by an industry expert. In many ways, it’s the perfect option for those new to stock investing.

Robo-advisors

As well as funds and ETFs, there is now a more newfangled way of trading stock: Robo-advisors. Robo-advisors are a smart technology that invests money on your behalf, based on factors including your age, your risk tolerance, and your long-term investing goals.

 

 

How much do you want to invest?

Another crucial consideration is how much you want to invest in online stock. It could be just a little money if that’s all you’ve got to spare. Or, maybe it’s a more substantial investment that you’ve been accumulating in your savings account.

Just make sure you do the appropriate investment research, to give you an idea of the results you can expect and how much capital gains tax you might have to pay. Really, you should only invest what you can afford to, so it is strongly advised that you take a good look at your personal finance before parting with any money.

Particularly as a beginner, you should not dip into your emergency fund or use money from student loans or a personal loan. And, while investing in stock typically won’t impact your credit score, bear in mind that it is less likely you’ll be able to invest in the first place if you have bad credit.

It doesn't matter whether you’re investing in a penny stock or taking a punt on an S&P 500 company. How much you have to spend and how you choose to invest it matters.

Setting a budget

Even if you’re investing with little money, you should budget the amount of money you want to invest when you buy shares. This is known as asset allocation, and it should take into account a few crucial factors. One of them is how much you have in your bank account. Another is your risk tolerance, which just means how much market volatility you are willing to withstand in your financial planning.

For those feeling stuck or overwhelmed with all they have to think about, there are a couple of options that might appeal. The first one is reaching out to a financial advisor through Personal Capital or another established company. They will know exactly what goes into creating a solid budget that suits your circumstances and end goals.

The second option is to sign up for an online short course that will teach you everything you need to know, including how to allocate assets appropriately. With a robust knowledge base behind you, you can feel confident that the investment decisions you make will be sound.

Opening your investment account

Now that you know how much you want to invest, it’s time to start thinking about opening up an investing account, which is also known as a brokerage account. This account will be one of your main tools for trading, because it’s the place from which you will pay for stocks, and also the place into which any earnings will be deposited.

Now, for a beginning investor, it can be tricky trying to work out which type of investment account to open. There are several to choose from, and they’re available from a variety of different stock brokers. However, generally speaking, there are two main types of accounts that beginners will need to choose between. One is a standard brokerage account, and the other is an individual retirement account (IRA).

Both will allow you to invest either in individual stocks or funds. As such, the key factors in your decision should be grounded in what your end goals are and how easy you want it to be to retrieve your money. To help you decide between these two main account types, here’s some
information about each of them.

Standard brokerage account

With a standard brokerage account, you can invest more than you could with an IRA, and you’ll have constant, easy access to your money. There are also plenty out there that don’t have an account minimum requirement, which means you won’t be limited when trying to open or operate your account. This makes it an ideal option for people looking to invest on a casual basis.

Individual Retirement Account

Individual retirement accounts are, perhaps unsurprisingly, created specifically to help people with their retirement planning.

They allow you to build up money with tax-free growth, so they’re perfect for long-term saving. A downside to this is that it can be very difficult to withdraw your money unless you’re at retirement age. Therefore, they're not ideal if you want to generate wealth for the here and now.

There are also other account types you might want to think about, for example, cash accounts and margin accounts. With an online education in stock trading, you could learn exactly what they are, how they work, and whether they’re right for you.

 

 

How to choose an online stock broker?

Once you know what type of investing account you want to open, you’ll need to decide which online brokerages you want to open it with. There are lots of different online brokers to consider, including big names such as Charles Schwab and Ameritrade. However, all of them offer different benefits, some of which just might not be necessary for you.

So, it’s important to take an in-depth look at what’s on offer. This might sound like a big undertaking when there’s so much out there, but you can make life a lot easier for yourself by narrowing down your search. If, for example, you want to look exclusively for a standard brokerage account, then you can filter your search by this criteria.

Further, if you’re going in as a beginner, it’s a good idea to look for a brokerage account that doesn’t set minimum deposits. You should also try to find one that allows for an easy balance transfer as and when you want it, without having to pay additional fees.

As a side note, it's important to bear in mind that there will be fees attached to transactions with some brokerage accounts. Figuring out what these are shouldn’t be too hard, though, as long as you look carefully at the advertiser disclosure for each account. This should include information on all major benefits and fees.

Check in on your stock portfolio

So, you know what stocks you want to invest in and you’ve opened your account. From here, it’s all about managing your investment portfolio. This is important for several reasons, and chief among them is that the stock market is notoriously volatile. Whether you buy or sell, you have to stay up to date with the bumps in the road as they’re happening.

Another reason to keep one eye on a stock screener or trading app is that you never know when a good opportunity might come up to diversify your portfolio. Diversification, or finding stocks to buy in a range of different sectors, means that if one industry is hit hard, the stock price of the other shares in your portfolio will remain robust.

And, if you're serious about building up an impressive portfolio, you could also consider checking out the stock chart of each share you want to invest in. Learn to read stock charts, and you’ll be far more likely to find investment opportunities that pay dividends in the long term.

Learn all you need to know about investing in stocks

It doesn’t matter what sorts of stock market investments you’re interested in, whether that be options trades, dividend stocks, or investing through mutual funds and ETFs. Either way, you must know the ins and outs of buying and selling before you get started. One of the best ways to do that is to learn stock trading, which you can do through a dedicated online course on investing for beginners.

With comprehensive, detailed information on day trading and virtual trading, this Stock Trading Online Certificate Course is the ideal crash course for those who want to start investing in stocks. You don’t need prior experience to sign up, either. Walking you step-by-step through everything you need to know, from trading strategies to technical analysis, this course will help you to level up your knowledge. So, after only 10 hours of study, you’ll be well-equipped to start making sound investments.

Why Courses for Success?

Courses for Success offers over 10,000 online courses, all of which aim to help you in your personal development and career progression. Not only that, but you can also study them anywhere and at any time, and take them at your own pace, too.

You don’t need career diplomas or specific experience to get started. With every course we offer created to be as accessible as possible, you can be sure that all of them, from our coding courses and trading courses to design courses and developer courses, will help to boost your prospects, no matter who you are.

Beyond just the education itself, students will be issued with a certificate online after successful completion of each of the learning courses they do. Our stock trading skills courses are no exception. Our Stock Trading Online Certificate Course skills certificates are recognized by industry leaders. You could really make a name for yourself in the business world by signing up for a Courses for Success short course.

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