Have you been thinking about trying your hand at investing?
You may have heard of finance apps like Robinhood, Acorns, or Stash as good starting points. How should you choose between them?
Advisors say that you should choose a platform that works best for your financial needs.
But besides finding the right app, here are some tips that can help you have a good start in investing.
Are You Financially Secure Enough to Invest?
It is important to be in good financial shape before you start putting money toward investments. This would entail setting aside a fixed budget and an emergency fund while still being able to pay your expenses.
A lot of first-time investors think that investing will lead to big gains quickly, but that is simply not the case. Novice investors will face a harsh reality the first time they enter the market.
Know the Market
Another important step is to learn the basics of investing as well as market movements in order to make informed investment choices.
While investing apps are a great way to get started, not all are created equal. Some apps may charge higher rates; others do not. Some are limited to investing by themes; others give you a full range of the New York Stock Exchange.
Nonetheless, the apps offer a great introduction into how to start investing because they explain the basics. After learning about concepts like commissions and stock splits, you will be better prepared to make informed decisions about individual stocks and the market largely.
Put Aside Some Money to Start
You do not need to have a lot of money to get started, you could try your hand at micro-investing.
Finance apps like Acorns and Stash specialize in this area. You can get started investing in fractional shares of companies with just a few cents, change you could spare while buying coffee on your way to work.
You do not need a lot of money to start investing, you just need to manage some money on the side. There is no such thing in the stock market like starting too soon.
Opening a Brokerage Account
While starting with the apps is fine, you may eventually want to consider moving over to a brokerage account with an investment bank. There is more flexibility to pick individual stocks and ETFs.
Additionally, there is also more strategy involved with buying and selling stocks, such as options trading and limit buying.
However, it is best to sit down with a financial firm to strategize what may be the best option for you and your financial future in the long run. Firms like Mooney Lyons can help you sort through your finances and help put away money for investing purposes.
Seek Investing Advice from Finance Professionals
If you are not ready to invest on your own, but still have some money saved to start investing then it may be best to consider hedge funds. These funds are managed by a finance professional with years of investment and market experience.
A good way to help you prepare to maximize on your future earnings is to have a solid plan in place. Consider sitting down with a finance professional to see whether this is a viable option for you.
Let us help point out the potential in investing at the different stages of your life. We provide advisement services to help put you on the right investment path early on. Get our counseling on your investment portfolio and find the right time to withdraw from your account.
All investing involves risk including loss of principal. No strategy assures success or protects against loss. There is not guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
The opinions voiced in this material are for general information only and are not intended to provide specific advice ore recommendations for any individual. All performance referenced is historical and is no guarantee of future results.