- Getting into the stock market can be overwhelming. How you start will depend on your goals. Are you funding a ‘play money’ account or starting a retirement fund? Once you decide your motivation for getting started, pick your “how.”
Pick an app
You used to have to buy a full share of stock but apps now let you buy part of one share. This is called a fractional share. It lets you start investing earlier because you don’t need as much money to get started.
There are a few apps to choose from when buying your first stock. Robinhood got a lot of publicity this year when Reddit users decided to all buy GameStop at the same time. Their company is going public this week on July 28 which means you can buy stock in a stock buying app.
Stockpile is another. Stockpile also sells gift cards so you can buy stocks for people as gifts. This is a great idea to get a younger friend or family member involved with investing.
Buy a Stock
It’s important to pick a stock you enjoy following. That will make it a lot more fun. Think of the companies you buy from or use a lot. Nike, Starbucks, and Apple are worth looking into.
It’s also important to pick a company with a good trajectory. You want to pick one that has proven it’s going to make money.
Follow the Stock Market and Diversify
Once you hold more than one stock, don’t get all tech or all fashion. This makes it easier to ride out the bumps in any one industry. The market reacts to the news so it’s common for certain industries to go up and down together.
Play the Long Game
Timing the market is really hard. It fluctuates constantly, even throughout the day. The goal is to buy low and sell high. The easiest way to do this is to allow a lot of time for the value to increase. You have to get used to seeing the value go up and down but follow the trend line longterm.
If you pick a larger, more established company they will pay you dividends. That’s when they share some of their profits with you. You can reinvest this money by using it to buy more stock or you can keep it.