8 Stock Tips (start investing today)
Oct 19, 2024Read time - 3 minutes / Disclaimer
Today let's review 8 stock tips.
If you're new to investing, these tips may help you:
• Better understand stocks.
• Feel more confident.
• Take the 1st step.
Unfortunately, investing is often viewed as complicated.
No Stocks In School
School teaches many things along with:
• Band
• Drama club
• Future business leaders club
Yes, I did them all...
A nerd at heart.
But—
Most schools don't teach anything about investing.
This leads many people to feel:
• Fearful.
• Uncertain.
• Unwilling to invest.
I felt the same way at first.
We fear the things we don't fully understand.
But the motivation to learn can outweigh those fears.
Especially when seeing the power of compound interest.
If you haven't started your investing journey.
Consider opening a free account and start small.
Here are 8 stock tips to help grow your knowledge:
1. What is Stock?
A business offers stock to raise money.
If you buy stock, also called shares—
You own a small piece of a business.
2. Stock Exchange
Stocks trade on a stock exchange.
For example:
• New York Stock Exchange
• Nasdaq Stock Exchange
You can buy & sell stocks electronically.
3. Stock Index
A stock index tracks a group of stocks.
Popular stock indexes include:
• S&P500
• Dow Jones Industrial Average
Stock indexes track how the stock market is doing.
4. Stock Research
Before investing in a company’s stock, it’s important to research its:
• Business model
• Financial health
• Management team
It's important to understand the pros and cons of a company before investing.
5. Stock Risks & Rewards
Investing comes with risk.
Stock prices can change fast.
Managing your emotions is a big part of investing.
6. Stock Price
If more people buy—
A stock's price can rise
If more people sell—
A stock's price can fall
Stock prices adjust based on supply and demand.
7. Buying Company Stock vs Buying ETFs
Two common ways to invest in stocks are:
1. Buying company stock
2. Buying exchange traded funds (ETFs)
Company stock = owning 1 company
ETFs = owning multiple companies
8. Investing vs Trading
Investors buy stocks expecting the value to increase over the long term.
Traders buy stocks expecting the value to change over the short term.
It’s important to identify what your goals are before investing.
Conclusion
There's no guarantees in life.
But —
Over the past 30 years, the S&P500 index has returned 10% per year on average.
That means $1 invested in stock has doubled every 8 years on average.
Two common S&P500 index funds are:
• Vanguard S&P 500 ETF (VOO)
• SPDR S&P 500 ETF (SPY)
Now that you've learned a few of the basics.
Are you ready to get started?
Saving for a home..
Saving for early retirement..
If so, there's many online stock brokerages out there.
​Fidelity and Vanguard have been around for decades.
Opening an investing account is free.
Start small.
Keep learning.
See you next week.
P.S.
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