Investing in the stock market has gained much popularity in today’s world of investing. Investing in stocks is a great way to potentially grow wealth. There are many tips first-time investors can benefit from before making a purchase decision. It can also seem quite intimidating with all of the numbers, graphs, reports and stock analysis within the stock market investment world. For starters, the stock market is a platform where individuals can buy and sell stocks. Among the most popular platforms to buy and sell stocks is the New York Stock Exchange and Nasdaq. When people say the phrase “the stock market was down/up today” they are referring to the stock market as a whole based on that day’s daily performance.
In order to participate in the stock market, you need to have money and a broker. A brokerage is a financial institution that facilitates the purchase and selling of stocks between a buyer and a seller, which is a market platform. On most of these platforms, there is a trading fee initiated with each transaction, generally a small fee. With all of the information widely available online regarding stocks, many people are still reluctant to the investing process associated with the stock market simply because they do not know how and where to get started.
A stock evidently represents part ownership of a company. Stockholders do not own the corporations which they are invested in, but rather own shares issued by corporations. Owning shares of a company allows investors to sell their shares for a profit if and when the share price goes up, and sometimes down in some cases. Owning shares of a company also gives you the right to vote in shareholder meetings and receive dividends if they are offered by that corporation. When first-time investors attempt to buy shares of stocks, they generally opt for the big name companies like Apple and Google. This is not the smartest way to approach this as you would need an abundant amount of capital to experience significant and meaningful growth because your ownership would be very minuscule. It is a much better idea to go after companies and industries that you are most knowledgeable about. This is a great tactic simply because you will have familiarity with those industries that other investors don’t.
In order to get comfortable with the trading process, it is always advised to seek assistance from a knowledgeable stockbroker. Stockbrokers serve as educated and licensed investment experts. They advise their clients on the most effective way to maximize their earning potential. There are many brokers out there who typically work on a commission basis. However, now investors are placing trades through an online brokerage account. Below are the most common accounts with their benefits.
TD Ameritrade: Although they have high trade commissions and costly broker-assisted trades, this is among the most popular trading platform used today. With a large selection of investments and no account minimum, TD Ameritrade is a very high-quality trading platform.
Trading fee: $6.95
Ally Invest: This is a great platform for active traders. Low trading commissions and free research tools can be appreciated by new investors.
Trading fee: $4.95
Merrill Edge: This is a popular parent company of Bank of America offering high-quality customer service. They also offer free trades for Bank of America customers.
Trading fee: $.95
E-Trade: Probably the most popular and beginner friendly platform, they offer free streaming of market data, free real-time quotas, live market commentary and more. They also have three trading platforms, E-Trade Web, OptionsHouse, and E-Trade Pro, with two available mobile applications.
Trading fee: $6.95
Fidelity: Easily customizable for advanced traders, with low commissions. It also offers a great number of mutual funds, waiving the transaction fees. They also offer two index funds with nonexpensed management ratio.
Trading fee: $4.95
Charles Schwab: Very good platform for beginners, but also appeals to all active traders. Also, they are one of the most recognized and used stockbrokers today They are excellent for investors who rely on premium research.
Trading fee: $4.95
When investing in the stock market, intricate strategies and approaches are the basics to a successful trading experience. Many successful investors like Warren Buffet have used the stock market to exponentially grow their wealth. Although stock investing is not a get rich quick investment, it can drastically grow your wealth over time if done correctly.
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