The Ultimate Stock Investment Guide

Investing in stocks is an excellent way to make your money grow. One of the best ways to start investing in the stock market is by opening an online investment account that can be used to buy shares of stock or mutual funds. 

There are several ways to go about investing in stocks. Here are the most common ones:

Choose stocks and invest on your own: For this, you need to know how to pick good stocks, work out how much to invest, and know when to sell or buy more stocks. 

Get an expert to manage your investment on your behalf: You can always opt for a service that offers investment management at an affordable cost. Almost all brokerage firms offer this service. They invest your money keeping in mind your stated goals.

Invest in your employer’s 401(k): This is perhaps the easiest way for beginners to dip their toe in the stock market. Investing in your employer’s 401(k) teaches you the most basic concepts of stock investing like making small investments regularly with a focus on the long term.

Investment Account

To invest in stocks, you need an investment account. This actually means opening a brokerage account. For people who want to invest on their own, an online brokerage account probably offers the easiest and most cost-effective way of buying stocks, mutual funds, and other investments. However, you will have to evaluate brokers first, based on their costs (trading commissions, their fees), their investment selection, and their level of expertise in the field.

Robo-Advisors or Investment Managers

Robo-advisors offer cost-effective investment management services. These companies will require you to inform them about your investment goals and they will build up a portfolio for you in line with your aspirations. The management fees applicable to a robo-advisor account are quite low, in comparison to having a professional (human) fund manager looking after your investments. 

Mutual Funds and Stocks – the Difference

Mutual funds allow you to buy small bits of different stocks in a single transaction. Index funds and ETFs (Exchange Traded Fund) are examples of mutual funds. The benefit of mutual funds is that your portfolio is diversified on its own. In comparison, building a diversified portfolio with individual stocks is possible, but requires a large investment.