Personal Finance

How to start stock market investing: strategies for beginners

stock market investing

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This guide outlines how to start stock market investing for beginners, with strategies and tips to safeguard you.

Every day, people talk about the stock market. Even those who don’t invest their money in the market talk about it because they know that its performance can affect them. So, if you have been curious about it and you’re interested in stock market investing with some of your hard-earned money to try to make a profit from it, you aren’t alone.

While it does take some time to do your research and get the hang of how stock market investing works … once you do understand it, it shouldn’t be too hard to manage your trades. 

To help you get started, we’ve compiled some tips on how to get into stock market investing and how to trade shares. Remember, however, that if you want personalized support, guidance, and advice, it’s always a great idea to consult a financial advisor who can help you navigate the stock market effectively. 

Also worth noting: stock market investing comes with a good amount of risk. This means you may run the risk of losing the money you invest in it. Therefore, if you would prefer taking a safer route to invest your money, you might be better off considering other investment options, of which there are many.

Again, speaking with a financial advisor to improve your finances can help you make the decision that will be best for you and your finances in the short-term and in the long run. 

Stock market investing for beginners: the steps

First, Find a Broker

To start trading stocks, you have to open what is known as a brokerage account. These days, you can find brokers surprisingly easily, and you can even go with online brokers if that suits you better. The key is to find the broker that is right for you, so do your research, compare your options, and make the decision that you think is most appropriate for your needs and preferences. 

Not sure which broker to go with for stock market investing? It’s totally understandable to feel a little overwhelmed once you start researching the many different options that are currently available.

Many brokers might get fabulous reviews, so it can be super difficult to determine which one is truly the right one for you. In this case, you might want to consider asking people you know personally for some advice. For example, if you know friends, family, or coworkers who are investing in the stock market, they might be able to direct you to a broker that they enjoy using. 

Use a Demo Account to Get the Hang of Things

Some stock brokers might offer you the option of giving stock market investing a try with a demo account before you invest any of your real money in the market. This is a fantastic way to learn how to trade stocks because there is absolutely no risk involved.

And when you are a total beginner, you definitely want to get some stock market investing practice before you risk putting your money in the market because, yes, there is the risk that you will lose it if you end up making the wrong moves and trading the wrong stocks at the wrong time. So, go ahead and practice as much as you can until you have built up enough experience and confidence to get into the real market. 

Learn the Ins and Outs of the Stock Market

In addition to using a demo account, it is also a good idea to take some time to watch educational videos about stock market investing and how it works. That way, you can get a combination of trading principles and hands-on application of what you are learning if you are also making use of a demo account.

This can be a great way to discover what it’s like to trade stocks successfully, and may help set a strong foundation that you can use when you are ready to invest real money into the real stock market. So, even though it might delay you jumping in for a bit, it might be worth taking some extra time to be sure you learn the ropes. 

You might be surprised by how much information you can find online when it comes to learning stock market investing. You might come across webinars, YouTube videos, and websites that offer training. Some educational sources might be totally free, which is certainly a plus, while others might charge a fee, so it is up to you to decide if you want to spend some money to get valuable information that could come in handy once you start trading.  

Figure Out How Much You Are Willing to Invest

As mentioned above, stock market investing does come with a good amount of risk, so this isn’t something you should take lightly. Properly educating yourself on what it takes to succeed in this market is part of the process, but calculating how much you feel comfortable investing is also an important component of the process.

Putting your entire savings into stock market investing isn’t the best idea, but taking a small amount of your savings, especially when you are first starting out, is a smarter move. If you find that you really enjoy trading shares and you are doing well, you could always invest more. On the other hand, once you lose money in the stock market, it may be difficult to make it back. 

Once you determine how much money you are willing to put into this exciting market, it is then a matter of deciding which stocks you will invest in and how many shares you will purchase. With all of the training you did, and the help of your broker, you will be able to do just that, and you might be surprised by the returns that are possible.  

Use Tools to Track and Analyze Stocks

Today, certain stocks might be doing extremely well, but tomorrow, they might do poorly. Things in the stock market are always changing. So, learn about the tools you can use to keep track of the performance of various stocks, and use those tools every day to make trades that will reduce losses and generate high returns.