Table Of Contents
Why Should Beginners Invest in Stocks?
How to Get Started with Stocks for Beginners
Tips for Building a Strong Stock Portfolio
action steps:
FAQs
What are the best stocks for beginners?
How much should a beginner invest in stocks?
Important Investing Terms:  

Why Should Beginners Invest in Stocks?

Investing in stocks is a great way to multiply your money and beat inflation. Unlike parking your money in traditional savings accounts, stocks have the potential to grow your money at a faster and higher rate. You actually lose money when you let it sit in a savings account. In this article, we will provide insights and tips for beginners to help them pick winning stocks and build a strong stock portfolio.

Here’s the funny part, banks invest the money you hold in savings and checking accounts in stocks and real estate. They do this because they understand that money must move or it loses its value. That’s why money is called “currency”. Money/currency is meant to move around. If your money isn’t moving then you’re losing (value).

How to Get Started with Stocks for Beginners

Determine Your Investment Goals: Before you start investing in stocks, it's important to determine your investment goals. Ask yourself what financial goals you want to achieve in a specified time horizon and how much money you are willing to risk in the meantime. You should only invest what you can afford to lose. NEVER INVEST YOUR BILL MONEY!

  • Research Stocks: As a beginner, it's essential to do your research before investing in stocks. Look for strong companies that are at the top of their industries, have been around for several years, have successfully weathered some recessions and still have room and a vision for growth.
  • Start with a Small Investment: Start small when you begin investing and gradually increase your investment as you gain more confidence, experience and knowledge. This has more of a psychological impact than financial. Starting small allows you to strengthen your emotional intelligence when it comes to your money. The less you start with, the less likely you are to get emotionally overwhelmed when the stock market takes a downturn, which it will, because it’s part of the economic cycle. 

Tips for Building a Strong Stock Portfolio

  • Diversify Your Portfolio: One of the most important tips for building a strong stock portfolio is to diversify your investments. This means investing in stocks across different sectors and industries. You don’t want to keep all of your eggs in one basket. If your favorite company or sector takes a negative hit, you want to have others that counterbalance that negative movement. Diversifying is much easier than it sounds. 
  • Invest for the Long Term: Stock investments are long-term investments, so it's important to have a long-term plan for when you will want/need to pull money out. Avoid making decisions based on short-term market fluctuations.
  • Monitor Your Portfolio: Regularly monitoring your stock portfolio is essential to ensure it stays aligned with your investment goals. Keep track of your investments and make adjustments as necessary. You should hold stocks for a minimum of 5 years to allow them to go through several economic cycles and bounce back as needed. When you pick solid companies, you don’t have to monitor them as much because you know that they are going to weather any storms that come their way.

action steps:

If you feel overwhelmed by the idea of investing, don't hesitate to seek help or advice from a financial professional or trusted resource to help you get started with your stock investing journey. 

If you’re the DIY type, and you’re serious about investing in the stock market, check out our easy to follow video training Stocks Simplified.

This course was designed for people like you that want to take control of your investing and not rely on anyone else to “manage” your financial future.

Stocks Simplified walks you through the process of picking winning stocks and shows you how to confidently build your portfolio for retirement or to pass on to your kids. It’s a lot easier than you think!

So, go ahead and take your first step towards stock investing! It may seem scary at first, but with a sound strategy and your willingness to learn, you can build a portfolio that brings you financial success and freedom. 

FAQs

What are the best stocks for beginners?

Everyone's investment goals and risk tolerances are different. However, you should look for companies with a good track record of growth and strong financials. There is one stock that every investor should have in their portfolio and you can get that here. 

 

How much should a beginner invest in stocks?

It's recommended to start with a small investment and gradually increase it over time. As a beginner, consider investing between $500 and $1000 or whatever amount you’re comfortable with.

“Competence creates confidence”

Important Investing Terms:  

Portfolio - a collection of financial investments owned by an investor or organization. This could be a collection of stocks, bonds, real estate, etc.

Time Horizon - the length of time before an investor will seek to take profits or proceeds from the investment.

Emotional Intelligence - the ability to understand and manage your own emotions, as well as recognize and influence the emotions of those around you

Economic Cycle - the overall state of the economy as it goes through four stages in a cyclical pattern: expansion, peak, contraction, and trough.

Diversify - composed of unlike investments that are not affected the same by economic cycles.

Sector - areas of the economy where businesses share the same or related business activity, products, or services.