Love a bargain? The stock market is currently on sale. And, while there are no guarantees the prices will go back up after the weekend, you can get some good deals if you make your choices wisely. Here are a few things to consider… and how to get started. For a more in-depth mini-masterclass join the free How To Be A Money Master facebook community and watch the video I recorded tonight.
The Basics:
1. A stock is a share of ownership in a publicly traded company.
2. Funds, including index and mutual, are also traded on the stock market. They include a variety of stocks, bonds, insurances, etc. Funds allow you to diversify without spending a lot of money. However, you pay for the time someone else is spending trying to make you money. And, they get paid regardless of whether you make money or not.
3. You can either buy/sell at the current price or choose your price and wait to see if someone wants to meet your price.
Choices:
1. Do-it-yourself or use a professional
2. Brokerage firm
3. Stock or fund you want to invest in
There are a number of brokerage firms available. Some charge a flat rate per trade, regardless of the number of shares. Some charge a monthly fee. Some have no fees, but have less flexibility. Choose the one that works best for your investing personality.
When choosing a stock, first think of products that you like, use daily, and that align with your core values. Then, use the Motley Fool’s “snap test”. If you snapped your fingers and that company disappeared tomorrow would anyone miss it? While this is not a deal-breaker, it can help you determine how likely a company is to bounce back after prices decrease.
***NEVER invest more than you can afford to lose***
There are no guarantees in the stock market and even the most beloved company can take a hit and never recover. But, with risk comes the potential for reward, which is why so many people keep investing in stocks.