If you are looking for a different income flow this 2020, investing in stocks may be the one for you. One of the basic financial tips for people in their mid-20’s is to never rely on a steady income from only one source. This means that having a job is fine, but if you want to be comfortable in life, there is wisdom in cashing in from different sources.
So in this article, we’ve collated the best investment tips for beginners. In stocks, that is. While stock investing can be a daunting task, once you have it pat down, it actually is quite easy. What you need to do is set up your portfolio, and when that’s done, you’re going to be golden. Of course, you’ll need to make some sacrifices financially too, but that’s about it.
Decide on how much money you want to start with
Similar to almost everything in life, stock investing is heavily dependent on how much money you want to invest first. Most beginner stock investors start with a thousand dollars, and some even lower than that. While it is true that you can invest with just a couple hundred dollars, we’d say that you need to have two grand at least to go in.
That two grand will buy you a good foundational stock. Foundational stocks are the stocks that ground your investing journey forever. It’s one of the things you learn when you enroll in online investment for dummies courses. If you are opening an online investment portfolio, the people behind the firm will always ask how much you are willing to invest – so be prepared for that.
Determine the type of investor your gonna be
The type of investor you are going to greatly depends on how you see yourself as a person. High-risk high reward type of people are going to thrive in investing stocks which are seen as risky while steady joes who want to be sure of everything in their lives may benefit greatly from stocks which are sure winners.
That’s not the only thing that needs deciding, though. You’ll need to decide what investment types you are into. Do you want to be an online broker? This is the best type of investing in stocks when you want to do it part-time. You can also invest through your employer if you want to. Robo-advisor is a field you can experiment as well. Do your research before you decide for yourself.
Diversify your stocks
Once you’ve decided to be a certain type of investor, the next thing to do is build your portfolio. Your investment portfolio is one of the most important things in your investing life. It’s your personal bible, a testament to how and who you are as an investor. Building your portfolio will take years to happen, and even when you’ve been in the game for quite some time, there’s a chance that you’re still portfolio-building.
A big part of building your portfolio is diversifying the stocks. Diversifying your stock is as simple a concept as it gets: buy stocks from different companies in order to play the field and make your portfolio as versatile as it can be. There are many benefits to these, one being able to reduce the risk of losing investment performance through the years.
Reduce your risks
While your building portfolio, it’s also a great idea to reduce the risks involved. Lucky you, diversifying your stocks automatically reduces the risks of your investments. Investing in one company won’t ever be the best course of action when it comes to beginners. It’s true what they say: Never put all your eggs in one basket.
Reducing the risks between your investments will require money. This is where the savvy needs to come on. A starting investment of a thousand dollars can only give you decent stocks from one company, so you’ll need to at least have another thousand to divide into 2-3 companies. Trust us when we say, there is wisdom is playing the field when it comes to stock investing.
Investing is not for everyone. That much is true. There is something to be said about people who know how to take risks, and in investing taking the plunge is something that’s needed quite permanently. Stock investing is as good as having a decent income if done right, but when you don’t have heart and passion for it, your portfolio’s going to be incapable.