2 answers

How do I invest in the stock market?

Hello,
I am a first year finance major at a university and I have been researching various types of investments. I am interested in investing some of my money in the DOW, S&P and Amazon. I do not know which brokerage firm is the best, or if ETF's are the best choice or how to even start investing. I was also wondering if I have a 'record' or portfolio on me once I start investing in the market, so how careful should i be with that in mind. I could really use some insight. Thanks. #accounting #money #investment-management #finance #stockmarket #business #investment-management

2 answers

Brad’s Answer

Updated Lehighton, Pennsylvania

You can open an online brokerage account at Schwab. It costs $4.95 to purchase or sell a stock. There are also mutual funds available that don't have any fee, but you have to hold them for something like 60 days before you can sell without a penalty.

A few things to remember:

1) never invest what you cannot afford to loose

2) paying off debt can be a guaranteed "return on investment" if you have debt. This is because you save interest you would have paid... and that savings is like a tax free investment. Paying off a 7% interest loan, can be the same as a 10% return on investment, because you have to pay taxes on your investment returns.

3) research - invest in what you understand. If you don't understand an investment, research it until you do.

4) come up with a long term plan, and stick to it to avoid being influenced by fluctuations in the market. But, balance that with having an open mind and being willing to change your long term plan if there's a good reason.

Its fun to see your investments grow. Everyone makes mistakes with investments, learn from them and go on. I've learned a few lessons from not doing enough research in some investments. But its rewarding to see your investment grow when you make good choices.

Kim’s Answer

Updated San Antonio, Texas

Gianna,

Here is a link to some educational material from an organization that I invest through. This organization handles investments for Public Sector employees, but the literature will still be helpful.

I encourage you to read as much as possible! There is so much to learn! Stocks - large cap, small or mid cap? Growth or Value? International? Diversifying - holding not just different funds, but making sure they are invested in different sectors of the economy (tech/healthcare/retail). Learning about the funds - past performance, have they changed managers, etc? Expenses!!!

I have invested in mutual funds for many years. In a mutual fund, the fund manager is supposed to stay knowledgeable and invest the funds assets in various things. This is because I don't have time to figure out how the rumored proposed trade tariffs will affect my funds and what I should do!

When you are younger, you are supposed to take more risks, as you have more time to recover. (invest mostly in stocks, not bonds.) But it is not easy to take risk and not interfere with your own plan. For example, losing 10% of $1000 might be okay, but how will you feel about losing 10% of $10,000? It's the same loss, but more money!

One thing I will say is this: if you have an employer who offers a 401 match, if you contribute x% of your income, take full advantage of it!

Anyway, here is the link. Good luck!

https://www.icmarc.org/rec.html#topic-dropdown:path=.InvestWhatISave|paging:number=12

Kim