If you are brand new to the stock market, our advice is to simply start small, and with some type of index fund.
An index fund is like a mutual fund but without the costs associated with mutual funds. An index fund is a big portfolio of stocks, and the stocks that are added or removed are chosen by rules. For example, an S&P 500 index fund will include the 500 stocks that are part of the S&P 500. Once you buy the fund, you don't have to manage it: it gets updated automatically as companies meet or fail to meet the requirements to be listed on the S&P 500.
Why start with an index fund? It's easy. You don't have to think too much. You make the purchase, and you can then sit back (more or less) and watch what happens.
Why the S&P 500? It's a generally safe bet that unless there is a huge market turn down, you're not going to incur massive losses. If you look historically, if you had bought the S&P 500 and kept adding money to that fund regularly, it would have survived all of the market turndowns and turned into a mighty profit... if you had stuck it out. Remember we talked about emotion before: sometimes emotion (and lack of education) causes you to sell too soon; at other times, it causes you to hold on too long.
Bottom line, start small. Get your feet wet. And don't put too much money on the line for starters. In fact, a good rule of thumb is to never put any considerable percentage of your net worth into any one stock or index fund: this protects you in case you really choose poorly and end up with a $0 balance in your portfolio.
Oh, by the way, it's so important to have a community to help you with your research and learning! So if you haven't yet, we heartily recommend you join our worldwide Break Diving community on this website---we have many others also pursuing the Financier - Stock Market dive from around the world. We even have people who are from your target country who can give you advice on what the laws may be in your country.
So to get started, your first steps should be... to join Break Diving. Then, go to the next article!
An index fund is like a mutual fund but without the costs associated with mutual funds. An index fund is a big portfolio of stocks, and the stocks that are added or removed are chosen by rules. For example, an S&P 500 index fund will include the 500 stocks that are part of the S&P 500. Once you buy the fund, you don't have to manage it: it gets updated automatically as companies meet or fail to meet the requirements to be listed on the S&P 500.
Why start with an index fund? It's easy. You don't have to think too much. You make the purchase, and you can then sit back (more or less) and watch what happens.
Why the S&P 500? It's a generally safe bet that unless there is a huge market turn down, you're not going to incur massive losses. If you look historically, if you had bought the S&P 500 and kept adding money to that fund regularly, it would have survived all of the market turndowns and turned into a mighty profit... if you had stuck it out. Remember we talked about emotion before: sometimes emotion (and lack of education) causes you to sell too soon; at other times, it causes you to hold on too long.
Bottom line, start small. Get your feet wet. And don't put too much money on the line for starters. In fact, a good rule of thumb is to never put any considerable percentage of your net worth into any one stock or index fund: this protects you in case you really choose poorly and end up with a $0 balance in your portfolio.
Oh, by the way, it's so important to have a community to help you with your research and learning! So if you haven't yet, we heartily recommend you join our worldwide Break Diving community on this website---we have many others also pursuing the Financier - Stock Market dive from around the world. We even have people who are from your target country who can give you advice on what the laws may be in your country.
So to get started, your first steps should be... to join Break Diving. Then, go to the next article!