2 answers

how Do I Initially Begin Buying & Selling Stocks? Should I Look Into Day Trading Penny Stocks ? Or Should I Invest Larger Amounts Into A Few Companies & Wait Until i Can Sell The Stock For More Than I Paid ?

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Im Just Now Looking To Invest In a Few Companies To Make Some Money, I Just Have No Clue Where To Start.
#stockmarket #business #hungryforinformation #entrepreneur

2 answers

Ben’s Answer

Updated

Vernon - this is a really good question to ask! I'm not a professional investor, but I do know one thing: Especially when it comes to stocks, knowledge is power. The more you know about stocks and company finances, the better you will do. So you're already on the right track by asking questions first!


There are a few things I recommend you keep in mind here:


(1) Investing is a zero-sum game. What that means is: money made by some people is money lost by others. Stock prices are affected by a lot of different factors, and on average they grow slowly over time. But some fall, and some rise, and it's very hard to predict those things. When someone buys low and sells high, someone else had to sell the stock to them at that low price and someone else had to buy it at that high price!

(2) There are people who get paid millions of dollars a year to do what you're doing. All they do is research for hours and hours every day, and even they aren't always good at making money on stocks! Those people are also trying to buy low and sell high; and those are the people you'd be buying from and selling to.

(3) The more diverse your investments are, the lower your risk. In other words, the more places you invest, the less likely it is that you'll lose money. Therefore, most investors would recommend putting 10% of your money into 10 different stocks instead of 100% of your money all in one stock - because if that one company with 100% of your money goes out of business, then you'd have no more money to invest!


So, unless (or until!) you're a professional, most experts would recommend you avoid day trading and instead invest your money more conservatively in bigger company stocks or, better yet, mutual funds. Personally, I've bought a whole bunch of stocks over the years; sometimes I made money, but usually I lost money! And I did lots of research on every company. So:


Here is a good article from a very reputable source about why day trading is risky.


And, here's another one on how to invest money as a beginner. While they may not get you rich quick, options like Certificates of Deposit (CDs) are a really safe way to turn some of your money into a little bit more!


If you enjoy investing your money, and you think this is something you want to get better at, I think it would be smart to keep learning as much as you can about corporate finance, strategy and economics before you consider investing in riskier stocks like penny stocks.


I hope this helps and good luck!

Updated
Thank You So Much Ben, Ill Most Likely Be Contacting You Directly In The Future

Ryan’s Answer

Updated

Hi Vernon -- Great question and something that gets asked from folks of all ages.


You're in luck, given the technological climate that exists today a lot of companies basic missions are to educate youth on buying and selling stocks . Apps like Robinhood or Acorns give everyone the ability to get their feet wet with the stock market.


Stockpile is also another great place to start the education process for as little as $5. Think the best way tot learn is by doing, so all of these applications give you the ability to actually start playing around with stocks.


Robinhood: https://www.robinhood.com/

Acorns: https://www.acorns.com/

Stockpile: https://www.stockpile.com/

Ryan recommends the following next steps:

  • Sign up for one of the applications