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Step-by-step guide to investing in stocks

by pps-DUEditor

Investing in stocks is the best way to grow your wealth. Despite this, many people shy away from investing in the stock market due to fear of losing their money. The thing is, if you are a long-term investor, you will be able to ride market downturns. In fact, if the market is on a downswing, you’ll be able to buy some great stocks at affordable prices. So, how do you get started? Read on to find out.

  1. Understand what type of investor you are: If you are a more hands-on investor, you should learn how to go about investing in the stock market. On the other hand, if you would like for someone to manage your investments, you may want to consider investing through a robo-advisor. Robo-advisors help manage your investments without you actually having to do the legwork to pick suitable stocks. You will, however, have to pay a certain fee to use this service.
  2. Open an investment account: Next, you’ll want to open a brokerage account. Opening an online account is likely to be your best bet since it is efficient and cost-effective. Through your brokerage account, you will be able to make transactions like buying and selling stocks easily.
  3. Decide which stocks to purchase: Once you’ve opened an investment account, you should decide which stocks you want to hold in your portfolio. To lower risk and maximize your earning potential, it’s important to have a well-diversified investment portfolio that is spread across different industries and asset classes. Make sure to also research the financial history of the companies you plan to purchase stocks from.
  4. Set a budget: As a beginner investor, it is important to not go overboard with purchasing stocks. So, ensure that you create a budget and stick to it. With time, you can slowly add to your positions and grow your stock portfolio.
  5. Start investing: Once you decide which stocks to invest in and how much to spend on your investments, you can start investing.

While it’s good to keep a track of market movements, ensure that you don’t make impulsive decisions based on market volatility since stock market returns are likely to average out over a period of time.

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