To the beginner trader, investing in the stock market can seem like learning to swim in the middle of the ocean. Luckily with help from the Internet, anyone can learn to trade and do so at the click of a button. This article will give you a background as well as the necessary steps to begin your new career in investing.
2 Ways to Invest
There exist two routes for investors to access the stock market. Direct investing, though investing is always performed by a third party broker, indicates investing in a single company in the form of shares. When just starting out, consider investing in blue-chip company shares as they are often the most reputable and profitable companies.
Indirect investing is much more common than direct investing, as it spreads the risk over several companies and it is highly unlikely for all of these to report simultaneous losses.
Get Started Investing
Investing has never been easier. Here’s a 5 step approach to tackling the stock market.
- First things first: Set aside the money you plan to invest, so you know how much you’re working with. Preferably you should start with at least £50. Keep saving so you can keep adding to this fund. The larger the investment, the greater the reward.
- Next, read up on investing terms so you understand how it works.
- Many stock trading services offer free practice investing with fake investments within the real market; take advantage of this service to hone your investing abilities.
- Decide on an online brokerage firm. These people will be your link to the actual stock market and any activity you wish to undertake will be performed by them. Make sure they are knowledgable about the industries you plan on investing in.
- Finally to succeed in investing, you must study the market. Investing is much more than knowing how to do it; it’s a consciously critical thought process that evaluates the likelihood of success and failure at the speed of 3,000 Lehman Brothers.
Hopefully this article has helped shine light on investing and demystified the entire process. Firstly decide on the type of investing you will be performing, whether direct with stocks or indirect in funds. Then, by following the simple 5 step process, you can become your own personal boss or even pension-granter.
Subscribe to Short on Value for future tips and advice about investments.
Short on Value is a Scotland-based financial advisory website that offers weekly tips to global investors.