WAYS TO INVEST IN STOCK MARKETS SAFELY

POINTS TO CONSIDER

---

1 Select your investing style

2 Open an account

3 Know the difference between stocks and stock mutual funds

4 Set a budget

5 Start investing

IN DETAILS

---

---

1 SELECT YOUR INVESTING STYLE

---

To select the kind of stock to invest in, you need to choose based on which stock best represent your situation.

The kinds of stocks available are: Stock managed and funded by yourself (Brokerage Account), and stock someone else manages for you (Robo-Advisor Account).

2 OPEN AN ACCOUNT

---

To get started, you need to open an account, either Brokerage Account or Robo-Advisor Account.
Brokerage account presents you the fastest and cost effective way to purchasing stocks, funds and other investment of your choice.

Robo-advisor account presents you the benefits of investing in stocks, but you’re not allowed to do the legwork required for picking an individual investment. Here, they would ask you about your goals for the investment and later builds you a portfolio that would help you achieve the goals.

3 KNOW THE DIFFERENCE BETWEEN STOCKS AND STOCK MUTUAL FUNDS

---

Stock mutual funds

This kind of stock affords you the opportunity to buy as many little pieces as possible from different stocks via a single transaction. Here, when you invest in a fund, you also own small pieces of each of those companies. This means that you’re free to build a diversified portfolio by putting different funds together.
The benefit here is that the stock is diversified and thus reduces your risk.

---

Individual stocks

Individual stocks offer you the opportunity to purchase a single or few shares from a specific company. In this case, it would take a significant investment to build a diversified portfolio.
The benefit here is that a wise pick can handsomely pay you and the vice versa is the negative side of it.

4 SET A BUDGET

---

To do this, you need to ask yourself, how much money do I need to start investing in stocks and how much money should I invest in stocks?
The amount required to purchase a stock highly depends on the cost of shares.

However, if you’re investment is through funds for a long time horizon, you can set aside a large portion of your portfolio for the stock funds.

5 START INVESTING

---

There are so many approaches to investment. You can use funds for the bulk of your portfolio. You can equally choose an individual stock if you believe in the potentials of the company in the long run.

---

---

REFERENCE:

Nerd Wallet

Thanks for reading!