King bell
VIP Contributor
Investing in stocks can be a thrilling experience, but it can also be difficult to understand. If you're just starting out with investing, read this beginner's guide and learn the basics. This article is your one-stop shop for everything you need to know about stock investing.
Firstly, let's talk about the two types of stocks you'll be able to invest in.
First-tier stocks are publicly traded companies that make up the majority of a company's overall market cap. You can buy these stocks in a brokerage account as an individual investor, or through mutual funds and exchange-traded funds (ETFs). These are generally less risky than mid-tier and low-tier stocks, but they're also possibly more volatile than higher tiers.
Second-tier stocks are privately held companies, only traded on the NASDAQ or the NYSE. Although they're smaller in size and lower in market capitalization than first-tier stocks, they offer investors high potential returns and less risk than mid-tier and low-tier companies.
To start making money in the stock market, you'll need to build a diversified portfolio. This means buying stocks in various sectors and companies, rather than just in one company or industry.
Here are some tips to help you diversify your portfolio:
Start with a "core" portfolio and add funds from there. Your core portfolio should include blue-chip stocks (large, stable companies), such as Microsoft, Intel and Johnson & Johnson. These stocks tend to be more stable than growth stocks (smaller companies that have potential for rapid growth), such as Twitter, LinkedIn and Apple. Add small positions in other sectors as your risk tolerance allows (such as real estate investment trusts).
Keep a percentage in cash. This helps you avoid the dilemma of having too many stocks, which can lead to over-leveraging and high fees. Don't be afraid to buy more shares of a stock if the price is right.
Know your spreads. One common strategy used by stock investors is to purchase "put options" on stocks that are currently priced at a low price. Puts are contracts that give investors the right to sell a stock at a specific price for a specified period of time. The higher the value of the put, or strike price, the more you'll make if it's exercised (i.e. the option is picked up by someone else).
Pick an investing style. Some investors prefer to buy individual stocks and hold them for a long period of time, while others concentrate on "short-term trading strategies." Sticking with one of these styles rather than switching from month to month might help you avoid the ups and downs of the market.
Firstly, let's talk about the two types of stocks you'll be able to invest in.
First-tier stocks are publicly traded companies that make up the majority of a company's overall market cap. You can buy these stocks in a brokerage account as an individual investor, or through mutual funds and exchange-traded funds (ETFs). These are generally less risky than mid-tier and low-tier stocks, but they're also possibly more volatile than higher tiers.
Second-tier stocks are privately held companies, only traded on the NASDAQ or the NYSE. Although they're smaller in size and lower in market capitalization than first-tier stocks, they offer investors high potential returns and less risk than mid-tier and low-tier companies.
To start making money in the stock market, you'll need to build a diversified portfolio. This means buying stocks in various sectors and companies, rather than just in one company or industry.
Here are some tips to help you diversify your portfolio:
Start with a "core" portfolio and add funds from there. Your core portfolio should include blue-chip stocks (large, stable companies), such as Microsoft, Intel and Johnson & Johnson. These stocks tend to be more stable than growth stocks (smaller companies that have potential for rapid growth), such as Twitter, LinkedIn and Apple. Add small positions in other sectors as your risk tolerance allows (such as real estate investment trusts).
Keep a percentage in cash. This helps you avoid the dilemma of having too many stocks, which can lead to over-leveraging and high fees. Don't be afraid to buy more shares of a stock if the price is right.
Know your spreads. One common strategy used by stock investors is to purchase "put options" on stocks that are currently priced at a low price. Puts are contracts that give investors the right to sell a stock at a specific price for a specified period of time. The higher the value of the put, or strike price, the more you'll make if it's exercised (i.e. the option is picked up by someone else).
Pick an investing style. Some investors prefer to buy individual stocks and hold them for a long period of time, while others concentrate on "short-term trading strategies." Sticking with one of these styles rather than switching from month to month might help you avoid the ups and downs of the market.
