Compare Stock Brokerages At The Stock Specialist
Looking for a stock broker to start your investing journey? Compare our list of the best stock brokerage platforms below
What to do if you want to invest?
First things first you need to work out what you want to invest in:
Individual stocks: You can invest in individual stocks if — and only if — you have the time and desire to thoroughly research and evaluate stocks on an ongoing basis. If this is the case, we 100% encourage you to do so. It is entirely possible for a smart and patient investor to beat the market over time. On the other hand, if things like quarterly earnings reports and moderate mathematical calculations don’t sound appealing, there’s absolutely nothing wrong with taking a more passive approach.
Index funds: In addition to buying individual stocks, you can choose to invest in index funds, which track a stock index like the S&P 500. When it comes to actively vs. passively managed funds, we generally prefer the latter (although there are certainly exceptions). Index funds typically have significantly lower costs and are virtually guaranteed to match the long-term performance of their underlying indexes. Over time, the S&P 500 has produced total returns of about 10% annualized, and performance like this can build substantial wealth over time.
Setting your budget
First, let’s talk about the money you shouldn’t invest in stocks. The stock market is no place for money that you might need within the next five years, at a minimum. While the stock market will almost certainly rise over the long run, there’s simply too much uncertainty in stock prices in the short term — in fact, a drop of 20% in any given year isn’t unusual. In 2020, during the COVID-19 pandemic, the market plunged by more than 40% and rebounded to an all-time high within a few months.
Money you’re socking away for a down payment, even if you will not be prepared to buy a home for several years
Opening an investment account
Using our stock brokerages listed above, you can easily enter the world of stock investing safely and quickly.
Choosing your stocks
Now that we’ve answered the question of how you invest in stocks, if you’re looking for some great beginner-friendly investment ideas, here are five great stocks to help get you started. Of course, in just a few paragraphs we can’t go over everything you should consider when selecting and analysing stocks, but here are the important concepts to master before you get started:
- – Diversify your portfolio.
- – Invest only in businesses you understand.
- – Avoid high-volatility stocks until you get the hang of investing.
- – Always avoid penny stocks.
- – Learn the basic metrics and concepts for evaluating stocks.
More about The Stock Specialist
The Stock Specialist was created to give our users the insight that they need to make informed decisions on stock brokers.
We do this by offering a simple comparison of stock brokers for our users assessing our customers’ needs and recommending our top choices of online stock brokerages.