I want to learn how to make a second stream of income. I am currently in my 4th-year of college. I want to develop my assets so I will have a lot of money for the future. I do have a bit of capital to start off with and I am not afraid of assuming risk. How do I best use it?
Ben - You've already checked two boxes that are, in my humble opinion, a necessity, to invest in the stock market - i.e capital & the willingness to take on risk. First off, find a trading platform or brokerage firm that is reputable + charges a reasonable commission (Fees could vary anywhere from $4 - $10 per trade). Analyzing trends maybe helpful, but knowing the company through usage of their product (Apple, Fitbit, Samsung, Facebook etc) or through following (Sports teams, social media etc) is an even bigger edge. At the end of the day the concept is simple - buy low, sell high. Timing is key, and when your gut tells you it's time to buy/sell, follow it. My final tip would be to treat the capital you're investing as money you may not be able to recover in the future - This attitude has helped me tremendously from a psychological standpoint. Best wishes - P
There are many ways to invest. If you are mathematically gifted, you may try the quantitative (quant) approach. Look up people like Ed Thorp or Jim Simons. However, you'll find that most of the successful investors use fundamental, bottom up, value approach. The basic idea of this approach is to buy businesses at prices below their intrinsic value. People who practice this successfully include Warren Buffett, John Templeton, Mario Gabelli, etc. So, my suggestion is that your best bet is to emulate these investors.
1. Read about stock market. Keep an eye on stocks of some High mid and medium range of companies. See their trend and invest.
2. You should invest when market is down and redeem when market is up.
3. If you do not have time for research in stock market, look for some good mutual fund and see where they invest and follow those stocks.
4. Also, another good option is systematic investment in mutual funds.
Check out Robin Hood which is a platform that allows you to place stock trades for free.(https://www.robinhood.com/).
Note there are SEC and FINA fees on sell orders. More info here: https://support.robinhood.com/hc/en-us/articles/208650436-Fees-on-Robinhood-