Originally, many people did not invest because investing was simply difficult; however, today investing has become far easier but still poses its challenges. The biggest challenge people face when trying to get into the stock market is not knowing how to get started and becoming lost in the excessive amount of information available on the web. This information can at times seem overwhelming and send many people back to the drawing board because they are not sure what to do with the information they have read. So, let’s start at the drawing board and the challenges people face causing them never to begin investing:
5. You do not know where to start – FIX: Start by reading blogs/articles on Investopedia
Investopedia is my go to suggestion for investing education and financial news. Simply visit their website and search for helpful tips for beginning investors. You can start with something as simple as ‘which trading platform is best to begin investing with’ to something as complex as the world of cryptocurrency. This is a great starting point to acquire beginner’s knowledge about how to invest. Which brings me to what may be your next problem. You are going to need someone to talk to about the information you have read. You should first spark up a conversation in your company’s breakroom and try to find someone at work that seems familiar with stock and begin to exchange ideas.
4. You need help to deepen your understanding of investing information – FIX: Download Stocktwits
Stocktwits is an app you can find in your app store. Like twitter you create an account to tweet, follow others, and have others follow you. The only difference here is everyone is tweeting about a stock they are either invested in or interested in. On Stocktwits, you will find it does get a little heated around some tickers, but in no time, you will begin to learn the culture and pick up valuable information. If you come across words or phrases you do not know go back to Investopedia and look them up. For example, you will come across the words bearish and bullish underneath someone’s tweet. It is important to know what these two terms mean and what side of the fence you are on for that stock. People often exchange information and latest news on the tickers they are following. Click on posted links and read! Lastly, if you are not sure which tickers to follow, again, go back to Investopedia and search ‘top stocks to invest in for 2018.’ Choose 3- 5 stocks you think you would be interested in and begin to follow them on Stocktwits.
3. You do not have money to waste – FIX: Download Stocktrainer
Stocktrainer is exactly what it sounds like. It helps to train you on how to invest in your stock and watch your stock. After completing your Investopedia research on the 3-5 stocks you chose, also called your Due Diligence DD, follow your 3-5 tickers on Stocktwits; next, it is time to virtually invest in your chosen stocks. Look over your budget and decide what you can afford to invest every month and then add a zero. If you look over your budget and realize you can afford to invest $100 a month (YES! You can begin investing with as little as $100), add a zero and virtually invest $1000 on Stocktrainer. Stocktrainer is virtual investing that offers you a real life investing experience. Watch your stocks and your money for the next 6 months but continue to do your due diligence.
2. You see so many sources online but do not know which one to trust- FIX: Download Yahoo Finance
Yahoo Finance makes doing your due diligence easier. It is a one stop shop for the latest trending news on companies, stocks, and financial reports. In the app, click on ADD SYMBOL (which is usually three letters); your symbols are the 3-5 stocks you chose earlier to follow and virtually invest in. After adding the symbols, Yahoo Finance will automatically put any news relating to your chosen symbols at the top of your news feed so you that can stay abreast with what is happening in your company. Investing is more than watching your money grow, and it also makes you apart of the company, so act like it. Care about how the company is doing, what is being said by locals (Stocktwits) and experts.
1. You do not know which platform to use for trading – FIX: Research/ Download Robinhood or Ally
While there are many trading platforms you can use, when choosing a platform consider the trading and selling fees. As of this blog, Robinhood allows investors to buy, sell, and trade with 0 fees, and Ally currently charges $4.95 for each transaction. Other platforms have fees near $7.95 or more per transaction. This is important to consider because if you only have $100 to invest, these fees eat away at your total investment amount. Let’s say you purchase stock with one of your favorite name brands XYZ. XYZ is currently being traded at $5; however, you are using a platform that charges you $10 per transaction, you now only have $90 to invest after fees are deducted for buying stock with XYZ. Let’s say this stock does well and you double your money when you sell your shares you must pay another $10 transaction fee to sell it. After total paid fees, you have only invested $80. While initially this may seem like a lot, these fees will be minor in comparison to your earnings.
Whitney is the Vice President of Diapers 2 Deposits’ Financial Literacy program and Head of Strategic Partnerships. You can find Whitney in public school classrooms and virtual classrooms. The information in this blog is intended to enable readers with tools to take their first steps in investing, and it is not intended as and does not constitute investment advice. The information presented by blogger Whitney is the views of her own and should not be construed as any endorsement or sponsorship of any company or app mentioned.