How to Invest in Stocks market Beginner Guide

How to Invest in Stocks market
Stock market also jnown as equity market or share market is the aggregation of buyers and sellers of stocks also called shares, which represent ownership claims on businesses; these may include securities listed on a public stock exchange, as well as stock that is only traded privately, such as shares of private companies which are sold to investors through equity crowdfunding platforms. Investment in the stock market is most often done via stockbrokerages and electronic trading platforms. Investment is usually made with an investment strategy in mind. Investing in stocks is an excellent way to grow wealth. For long-term investors, stocks are a good investment even during periods of market volatility stock market downturn simply means that many stocks are on sale.
But how do you actually get started? Investing in the stock market can be as simple as opening a brokerage account and choosing a few individual stocks or mutual funds. The whole process can be done online, and there are services that can invest in stocks for you for a small fee. Here are some tips to learn how to invest in stocks:

1. Decide how you want to invest in stocks 
There are several ways to approach stock investing. Choose the option below that best represents how you want to invest, and how hands-on you'd like to be in picking and choosing the stocks you invest in. Once you have a preference in mind, you're ready to shop for an account. 

2. Open an investing account 
Generally speaking, to invest in stocks, you need an investment account. For the hands-on types, this usually means a brokerage account. An online brokerage account likely offers your quickest and least expensive path to buying stocks, funds and a variety of other investments. With a broker, you can open an individual retirement account, also known as an IRA or you can open a taxable brokerage account if you’re already saving adequately for retirement elsewhere.

3. Know the difference between stocks and stock mutual funds
  • Stock mutual funds or exchange-traded funds: Mutual funds let you purchase small pieces of many different stocks in a single transaction. Index funds and ETFs are a kind of mutual fund that track an index. When you invest in a fund, you also own small pieces of each of those companies. You can put several funds together to build a diversified portfolio. Note that stock mutual funds are also sometimes called equity mutual funds.
  • Individual stocks. If you’re after a specific company, you can buy a single share or a few shares as a way to dip your toe into the stock-trading waters. Building a diversified portfolio out of many individual stocks is possible, but it takes a significant investment. The upside of stock mutual funds is that they are inherently diversified, which lessens your risk. For the vast majority of investors particularly those who are investing their retirement savings a portfolio comprised mostly of mutual funds is the clear choice. The upside of individual stocks is that a wise pick can pay off handsomely, but the odds that any individual stock will make you rich are exceedingly slim. 
4. Set a budget for your stock investment  
New investors often have two questions in this step of the process: 
  • How much money do I need to start investing in stocks? The amount of money you need to buy an individual stock depends on how expensive the shares are. (Share prices can range from just a few dollars to a few thousand dollars.) If you want mutual funds and have a small budget, an exchange-traded fund (ETF) may be your best bet. Mutual funds often have minimums of $1,000 or more, but ETFs trade like a stock, which means you purchase them for a share price in some cases, less than $100). 
  • How much money should I invest in stocks? If you’re investing through funds have we mentioned this is our preference? you can allocate a fairly large portion of your portfolio toward stock funds, especially if you have a long time horizon. A 30-year-old investing for retirement might have 80% of his or her portfolio in stock funds; the rest would be in bond funds. Individual stocks are another story. We’d recommend keeping these to 10% or less of your investment portfolio. 
5. Focus on the long-term 
Stock investing is filled with intricate strategies and approaches, yet some of the most successful investors have done little more than stick with the basics. That generally means using funds for the bulk of your portfolio. The best thing to do after you start investing in stocks or mutual funds may be the hardest: Don’t look at them. Unless you’re trying to beat the odds and succeed at day trading, it’s good to avoid the habit of compulsively checking how your stocks are doing several times a day, every day.

6. Manage your stock portfolio
While fretting over daily fluctuations won’t do much for your portfolio’s health or your own there will of course be times when you’ll need to check in on your stocks or other investments. If you follow the steps above to buy mutual funds and individual stocks over time, you’ll want to revisit your portfolio a few times a year to make sure it’s still in line with your investment goals. A few things to consider: If you’re approaching retirement, you may want to move some of your stock investments over to more conservative fixed-income investments. If your portfolio is too heavily weighted in one sector or industry, consider buying stocks or funds in a different sector to build more diversification. Finally, pay attention to geographic diversification, too. You can purchase international stock mutual funds to get this exposure.

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