MAKE YOUR MONEY WORK FOR YOU: A NEWCOMERS GUIDE TO STOCKS 





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Investing in the stock market can be a great way to grow your wealth and secure your financial future. However, for those who are new to the game, it can be daunting to know where to start. Fortunately, there are plenty of resources available to help even the most novice investors get started. Whether you're a newcomer to the world of stocks or looking to take your investments to the next level, these steps will help guide you on your investment journey.

		5 Popular Investment Strategies For Beginners | Bankrate
		When you start investing on your own, the world of investing may seem wide, often too wide. But you can simplify things with some time-tested strategies.

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1. DECIDE HOW YOU WANT TO INVEST


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There are three primary ways to start to invest in stocks. Once you have a preference in mind, you're ready to shop for an account. The options are:


1. Choose stocks and funds on your own.
 
2. Get an expert to manage the process for you. 

3. Start investing in your employer's 401(k).

2. CHOOSE AN INVESTING ACCOUNT


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THE DIY OPTION: OPENING A BROKERAGE ACCOUNT
An online brokerage account likely offers your quickest and least expensive path to buying stocks, funds and a variety of other investments. 


THE PASSIVE OPTION - OPENING A ROBO-ADVISOR ACCOUNT 
A robo-advisor offers the benefits of stock investing, but doesn't require its owner to do the legwork required to pick individual investments. Management fees are generally a fraction of the cost of what a human investor would charge. 


One important note: Both brokers and robo-advisors allow you to open an account with very little money.







3. LEARN THE DIFFERENCE BETWEEN INVESTING IN STOCKS AND FUNDS


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If you're going the DIY route, keep reading! For many people, stock market investing means choosing among the following two investment types: 


STOCK MUTUAL FUNDS OR EXCHANGE-TRADED FUNDS
Mutual funds let you purchase small pieces of many different stocks in a single transaction. When you invest in a fund, you also own small pieces of each of these companies. 

Note that stock mutual funds are also sometimes called mutual funds. 

Learn more about how mutual funds work. 



INDIVIDUAL STOCKS 
If there's a specific company that you're interested in, you can buy a single share or a few shares as a way to dip your toe into the stock-trading waters. 

The upside? A wise pick can pay off handsomely, but the odds that any individual stock will make you rich are exceedingly slim. 

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		Hot or Not: Single Stocks in Your Portfolio
		Single stocks can be rewarding, but they can present some downside risk for your portfolio, too.

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4. SET A BUDGET FOR YOUR STOCK INVESTMENT


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New investors often have two questions in this step of the process. Answer them and you can move to the next step: 

HOW MUCH MONEY DO I NEED TO START INVESTING IN STOCKS?
The amount of money you need to buy an individual stock depends on how expensive the shares are. (Share prices can range from just a few dollars to a few thousand dollars.) If you want mutual funds and have a small budget, an exchange-traded fund (ETF) may be your best bet. Mutual funds often have minimums of $1,000 or more, but ETFs trade like a stock, which means you purchase them for a share price — in some cases, less than $100).

HOW MUCH MONEY SHOULD I INVEST IN STOCKS?
If you’re investing through funds you can allocate a fairly large portion of your portfolio toward stock funds, especially if you have a long time horizon. Individual stocks are another story. A general rule of thumb is to keep these to a small portion of your investment portfolio.







5. FOCUS ON THE LONG-TERM


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The best thing to do after you start investing in stocks or mutual funds may be the hardest: Don't look at them. 







6. MANAGE YOUR STOCK PORTFOLIO


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Of course, there will be times when you'll need to check in on your stocks or other investments. If you follow the steps above to buy mutual funds and individual stocks over time, you’ll want to revisit your portfolio a few times a year to make sure it’s still in line with your investment goals.










BOTTOM LINE:
Investing in stocks can feel overwhelming to those who are new to the game. However, it mainly involves determining your preferred investment strategy, selecting an appropriate account, and deciding on the ideal amount of funds to allocate to stocks.















For more, visit nerdwallet.com

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