Right now, you may be financially insecure, like most people. According to NBC News, as many as 78% of full-time workers in the U.S. live paycheck to paycheck. In addition, according to CNBC, nearly half of Americans don’t believe they will have a comfortable retirement.
Perhaps you’re in the same situation, or you fear of being in it. You want to make money without taking on another job or switching to a more lucrative career. You hope to secure your financial future and ensure you’ll have money for big life events like buying a home, paying for a child’s wedding, retiring, and making sure your family has an inheritance.
The only problem is that you don’t know where to place your money to ensure that it makes maximum returns. That’s why you need to learn how to invest in stocks.
By investing in stocks, you can gain shares without having to immerse yourself in the world of finance. You can simply sit back and let your money do the work for you. You can even cash out when you need to.
You don’t need to be a financial expert to know how to invest in stocks. With these five tips, you can get started today and make sure you have financial security now and in the future.
1. Start with Blue Chip Stocks
If you’re just discovering how to invest in stocks, buy blue-chip stock. Blue chip stocks are the best stocks from well-performing companies. They are considered wise long-term investments because they are reliable and there is a high chance they will make you money. Instead of just going with your gut and finding a random startup that might make you money, you can invest in blue-chip stocks.
One blue-chip stock to invest in is Apple, which has a market value of $870.6 billion, a dividend yield of 1.5% and is highly recommended by analysts. Other well-performing blue-chip stocks include Gilead Sciences (market value: $98.3 billion, dividend yield: 3.1%), Costco Wholesale ($81.4 billion, 1.1%), Starbucks ($82.7 billion, 2.1%), Merck ($147.1 billion, 3.6%) and Kraft Heinz ($74.8 billion, 4%). There are many other blue-chip stocks out there. You’ll usually be familiar with them because they are brands you know and trust.
2. Invest in Mutual Funds
When learning how to invest in stocks, you may decide that you don’t want to directly choose which stocks you’re going to pursue. Instead, you can invest in a mutual fund that you trust. A mutual fund is an investment portfolio that contains diverse investments including stocks, bonds and various securities. Expert investors manage them, and a lot of individuals will contribute to it. Usually, the annual operations fee is between 1 and 3%. There will be minimum contributions you have to make if you want to join the mutual fund.
Many people invest in mutual funds because they are generally low-risk, stable, and solid long-term investments, whereas bonds and stocks on their own are higher risk. There are more than 10,000 mutual funds to choose from, and the biggest ones include Fidelity Investments, the Vanguard Group, and Oppenheimer Funds. To find a mutual fund that’s best for you, look at U.S. News & World Report’s Mutual Fund Rankings page. You can sort by the type of ranking including long-term bond, short-term bond, corporate bond, technology, mid cap growth, high yield bond, and real estate.
3. Find a Reliable Stock Broker
The next part of learning how to invest in stocks is to decide what type of broker or investment service you’re going to use. When you use an expert stockbroker, you can rely on him or her to advise you on how to invest in stocks. Or, you can be proactive and pick your own stocks. Then, the stockbroker is there simply as the go-between so that you can get onto the market.
Today, while you can go to a broker in-person, it’s more convenient to use an online stockbroker. There are a number of platforms out there offering a wide range of services. You need to compare their capabilities, reviews, fees, and account minimums before you get started.
For example, Ally Investing’s fees are $4.95 per trade, and there is no minimum to get started. This makes it ideal for investors who are just starting out and learning how to invest in stocks. The platform offers its users free data, research, and analytical charts they can utilize when deciding how to invest.
Another platform is Ameritrade, which is $6.95 per trade and has a $0 minimum, like Ally. You can also do free research, and the platform is known for its stellar service. Merill Edge is another popular trading site that offers top-of-the-line customer service and research. Fees are the same as Ameritrade, $6.95 per trade, and there is no minimum.
Some other investment platforms are Fidelity Investments, which charges $4.95 per trade, Charles Schwab, which also charges $4.95 per trade, E*Trade, which charges $6.95 per trade, and TradeStation, which charges $5 per trade.
Make sure you do your research on each of these platforms by looking at reviews and testimonials from current users. Also, there are many websites out there offering promotions, so make sure you take advantage of those. You may be able to trade for free or get certain bonuses for signing up during a special time period.
If you want to discover how to invest in stocks, but you don’t want to go through a traditional broker, try a robot-advisor instead. Robo-advisors use math and algorithms to help you determine how to trade. Typically, they are cheaper than traditional stockbrokers, and you can just sit there and let the computer do the work for you.
Some robo-advisors include Wealthfront, which charges a 0.25% management fee and requires an account minimum of $500, Wealthsimple, which has a 0.40 to 0.50% fee and a $0 minimum, Betterment, which charges 0.25% and has a $0 minimum, and SoFi, which charges a 0.25% fee and has a $500 account minimum.
Remember to also do your research on robo-advisors and don’t just decide based on what they charge. Look at reviews, testimonials, and promotions from dependable sources before signing up.
4. Source Reliable Information on how to Invest in Stocks
When researching how to invest in stocks, you’re going to need to turn to reliable sources. There are a bunch of scammy websites and fake “experts” out there who will persuade you to invest with them, and not give you anything in return. If somebody claims to yield extremely high dividends and returns that sound way too good to be true, be cautious. They are probably trying to scam you out of your hard-earned money.
Instead, subscribe to reliable sources with factual information, solid research, and smart tips. Some places to start are The Wall Street Journal, which is published by Dow Jones & Company and features financial news, The Motley Fool, which offers stock advice for investors and personal finance services, and Yahoo Finance, which has free stock updates, international market data, and portfolio management resources.
There’s also MSN Money, which features news on the U.S. and global markets and provides rate tables, and The Street, which promises the latest stock market news and analysis straight from the floor of the New York Stock Exchange. All of these resources will teach you how to invest in stocks and help you stay on top of the breaking news about the markets.
5. Subscribe to Fast Fortune Club
Another reliable source of information that can be delivered right to your inbox on a regular basis is Fast Fortune Club, from Money Map Press. Tom Gentile, who is one of the foremost authorities on the planet when it comes to options, stocks, and futures trading, runs FFC.
Gentile has nearly 30 years of experience in the securities industry and is regarded as America’s #1 Trader. Using his rules-based trading strategies, he figures out the most lucrative trades on the stock market and quickly tells his subscribers.
Since starting FFC, he has taught more than 300,000 investors how to spot low-risk and high-probability trades. If you’re just learning how to invest in stocks, you can save time and energy by subscribing to FFC. You’ll get invaluable advice from Gentile on how to diversify and boost your portfolio in no time. What are you waiting for? Sign up today.