Investing in stocks is a great way to make money – either as a full-time job or part-time alongside your day job. Buying stocks isn’t hard, especially when you know how. In this blog post, we’ll look at 7 top tips for starting your stock trading journey.
1. Think About What You want to Get Out of Stock Trading
As with anything in life, there is a lot to learn with stock trading and before jumping in headfirst, you’ll want to consider what it is you want to get out of stock trading. Are you in it to make quick cash? Or are you in it for the long-haul? Whatever your personal goal is, you need to seriously consider how you will trade and ensure you have the proper educational resources and knowledge to make a comprehensive decision.
2. Consider and Choose Which Type of Investor You Are
Before investing your hard-earned cash, you need to understand what type of investor you are. When opening your online brokerage account, some brokers may question you about your long-term investment goals and strategies, as well as how much risk you’re willing to take on. Some investors want to actively get into and understand their money’s growth, whereas some are just happy to invest in stocks and shares and let them fluctuate over time. Many online brokers will let you invest in a variety of different stocks, bonds, exchange traded funds (ETFs), index funds and mutual funds.
3. Education and Training
Education and training is a great way to learn and understand the overall stock market as well as certain investment types. There are a number of fantastic educational resources online such as courses and seminars to help you gain valuable insights into the market. Not all courses and seminars will cost you either, you can find many free online resources to help you on your new venture. Find out more about financial trading courses and accreditations here: https://www.financialelearning.co.uk/product-category/financial-trading-courses/
4. Build an Investment Strategy
Successful stockbrokers have an investment strategy. An investment strategy acts as a bible to help guide you through your investment journey. It helps you to decide which investments you will go for and which ones you will discard based on the goals you are trying to achieve. When building out your investment strategy, it’s important to look at the end goal – what are you trying to achieve? While many are trying to achieve a profit, try and attach a number to this such as “In 10 years I want to achieve 10% annual return on my investments”. The more specific the goal, the easier it is to track and achieve.
5. Find Yourself a Mentor
Whether you’re new to stock trading or an experienced professional, finding an experienced mentor to take you under their wing is a great way of assisting you throughout your journey. They can help provide useful insights and ways of thinking that you may never have looked at before. Your mentor could be a lecturer, your manager or someone in the industry that has more experience than you. There are several great ways to find a mentor such as online groups and forums but the best way to get out there is by attending networking and trade events. These events often have plenty of influential and established members with plenty of market knowledge so are great in allowing you to network and find a mentor.
6. Continue Learning
The stock market is constantly changing so it’s important you keep up to date with current affairs and trends. News sites such as CNBC, Bloomberg and the wall street journal are all useful resources when it comes to keeping your finger on the pulse. In addition to checking the news, we also recommend you should read some books by some of the leading investors in their field such as the Intelligent Investor by Benjamin Graham – although this book was published over 70 years’ ago its principles around investing are still relevant today.
7. Ensure You Have the Finances to Start
While it goes without saying, having the proper finances to start investing is a key part of your investment journey. You will find that many financial institutions and online brokerage accounts have minimum deposit requirements, which can be as much as £1,000, however some accounts will be much higher. It’s important to do your research before depositing your money into any account and always consult a professional before doing so.
People invest in the stock market because they can have a huge potential to make serious money. It’s important if you’re planning to start trading stocks you have the proper knowledge to make clear and informed decisions.