Easy Equity: Getting Started In Stock Investing

Easy Equity: Getting Started In Stock Investing 

Hello Rookies!

Getting started into stock investing can seem like an intimidating task.  There are lots of figures to research
(like price to earnings ratios, daily stock volume, dividends history, much much more) and every analyst seems to have 
their own favorites and subjective opinions.  It is easier at the end of the day just to skip it and avoid stock investing all together.
Thankfully, there are much easier ways to get involved into stock investing without having to do much research
or have any professional knowledge of investing at all. 

Exchange Traded Funds (ETFs)
An exchange traded fund commonly known as an ETF is a group of stocks all in one equity purchase.  
For example - the ETF with the symbol of NOBL is made up of a group of stocks
that are considered low risk and high quality companies.  By purchasing 1 share of NOBL your money gets
divided into several different companies within the ETF.  The advantage of ETFs is that rather
than picking on stock you get to pick one ETF and its like you picked 50 stocks (depending on 
how many companies stocks the ETF contains).  This method holds true the age old advise
of not putting all your eggs in one basket.  An ETF is just that: several different baskets to put your egg
money.  Using a ETF can help you minimize risk and increase overall exposure to the stock market.  However, 
ETFs do come with managements fees and not all ETFs are equal.  A little research is still required here
as to what companies you feel you would like to invest with and then picking an ETF that contains
a large amount of them or looking at an ETFs stocks before purchase. 

Robo Advisors 

Several companies now offer what has come to be called robo advisers.  You simply give a company your 
investing money and they handle the rest.  There is usually a questionnaire that asses your overall goals 
and risk tolerance - and based on your answers the robo advisors decide where best to place your investments.
This is definitely the most hands off approach to investing.  These types of programs usually offer a flat management
fee for their services but typically not more than an ETF would and sometimes less.

Using Robinhood to build a custom ETF

For those that enjoy more of a hands on approach or you know exactly what companies you would like to own but 
can't find an ETF that fits - try using Robinhood to build your own ETF.  Robinhood is a fee free way to buy stocks.
The lack of fees allows you to build your own stock basket without having to worry about purchase fees (which can really
add up).  For example - you wanted to invest $5,000 and you have 10 companies that you would like purchase
you can simply split the $5,000 evenly amount the 10 into groups of $500 and buy $500 worth of each stock.
You have essentially just created your own ETF - with the advantage of no management fee.  This is 
a much more hands on approach but can be more rewarding overall if done with goals in mind.  Try Robinhood now 
and get a free stock to help your get your personalized portfolio started right away.

You May Also Enjoy:


Popular Posts