A Beginner’s Guide to Buying Stocks: 6 Steps for Success

When most of us think about buying stocks, we envision people in suits on Wall Street screaming and hollering at one another to get the best deal. We think that buying stocks has to be like we see in the movies, however it does not. Today, there are more and more average Americans looking to invest in stocks from the comfort of their own homes. There are numerous websites and apps that you can use to help you invest in stocks and make the best financial decisions for yourself and your family.

Whether you are looking to make a quick couple bucks or are looking for a long term investment, there are several ways to start buying stocks. Investing today could help you prepare for your future and leave you with a healthy retirement account. Here are some of the best tips that all beginners should follow if they are looking to invest in stocks.

#1) Research is Key to Buying Stocks

If you are looking to buy a stock, or several stocks, you need to make sure you thoroughly research the companies that you want to invest in. Take a few days to look at their past stock performance, their mission statement, their CEO, financial reports, and more. All of these factors can help you determine if you like what the company has done in the past and what their plans are for the future. There are thousands of different companies that would love to have your investment, so it is crucial that you find the one that meets your needs and goals.

Each year, millions of Americans lose money in the stock market simply because they did not do enough research before they invested their money. We are all looking to invest in the next biggest company, but this will not happen without research. Try using the trading platform to help you make educated investments.

#2) Buy Low

The most important thing to remember when buying stocks is to buy when they are low. Too many people get excited when they see that one stock has risen over 100 percent in a single day. It may be tempting to invest money into that stock, but avoid doing this if possible. When stocks skyrocket in a single day, they are likely to fall back down again. The spikes in the stock market are there for a reason. Buy when the line falls down and sell when the line goes back up.

The stock market is going to have gradual ups and downs, so it is important to find the times when the stocks are low and buy then. Choosing the right time to buy a stock is critical and can be the difference between thousands of dollars when you go to sell. Watch the stock for a few days and then determine what price point you would like to buy at. Use your trading platforms to set alarms that tell you when the price has dropped. This will be the ideal time to buy.

#3) Stay Calm

As previously said, the stock market will have gradual highs and lows. This is nothing to be concerned about. The value of your stock will fall and rise, just like all things. If you stay calm and hold onto your stocks, you should see a change in their value over time. Staying calm and holding onto your stocks for years could help you have a healthy retirement fund that you can be proud of.

#4) Plan for the Future

Another important factor to consider when buying stocks is what the future might hold. There are always changing policies that will affect the future of the nation economically. For instance, if you predict that in the future we will be living on Mars, you may want to invest in a space company. Planning for the future is the best way to invest in stocks that will increase the most over time.

If you are looking to make a quick dollar, you can invest in companies today that are changing. However, if you are looking for a long term investment, you should think about the policies that are changing. Then, you can find companies that support these policies and buy their stocks.

#5) Do Not Obsess Over Values

Another key thing to remember if you are a beginner looking to buy stocks is not to obsess over the daily value of your stock. For instance, you might invest one hundred dollars into a stock and see it increase fifty dollars in one day, or decrease twenty dollars the next day. If you choose to check your stocks multiple times a day, it will only discourage you and make you feel overwhelmed and slightly crazy.

It is important to make your investments and then let them ride, unless you have a good reason to buy more or sell them all. Avoid checking them more than once a week. This will help you maintain your sanity and ensure that you are keeping your investment for the long term benefits.

#6) Choose the Right Trading Platform

Another crucial piece of advice for beginners looking to buy stocks is to invest with the right trading platform. There are many different trading platforms available to the average consumer, so it is important to you carefully look into the benefits and downsides to each platform. Some are easier to use but come with higher fees, while others may require that you keep a minimum balance in your account. Read all of the fine print before you invest your money so that you are never taken advantage of.

Investing in the stock market is a great way to make money, however, it is critical that you do diligent research, buy low, stay calm, choose the right trading platform, and refuse the urge to check your stock value multiple times a day. It is possible for everyone to make money in stocks as long as they follow these tips. The more experience you get, the confident you will become, and the more money you can make as a result.

Once your ready to start investing check out Robinhood – one of our favorite platforms.

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