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How to invest in stocks

August 18, 2017

How to invest in stocks

The prices of all the commodities in the world are rising by the minute. It is not something new for any of us. What a unit of money could buy once upon a time has no value today. As such, when we are so ready to spend so much on coffee, clothes and every other object of interest, why not invest in them? However, going blindly behind what you see would not be the way to go.

Investing in stock market is mostly about choosing between equity index funds/ exchange traded funds and individual stocks. Exchange traded funds give you the chance to purchase chunks of various stocks in one transaction. This will enable you to develop a diversified portfolio through a single transaction. However, if you want to invest and buy a single or a few shares of a particular company, it would be called an individual stock. Diversified portfolio can be made out of individual stocks to if significant investments can be made

Regarding the amount of money you should be investing in stocks, a good portion of your portfolio can be put into stocks if you are investing through funds. This will work in your favor if you have a long time horizon.

There are good chances that you’re already invested in stocks if you’re enrolled into the company sponsored retirement plans like 401(k). However, most of these employer-sponsored plans stay away from individual stocks. If you’re not satisfied with the choices of these schemes in investments, you can always find an online broker who could buy stocks, funds and explore various investments for you.

Always make sure to be backed up by your research before investing in individual stocks. Do not give into the herd mentality and go for what looks the best. While the market can’t be predicted, your research could help you achieve better.

Investing could be as unpredictable as possible. It will be a rollercoaster ride, but not giving up is the key.

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