The key to smart investing is not to make a huge killing on one stock or investment. While that is nice, it is rare. Many who do make a great deal of money on one investment spend a lot of time chasing it and may lose money in other attempts. Instead, look for steady gains over the long haul.
Look for Ways to Invest in the Whole Market
If you have access to a 401(k) at your job, get enrolled as soon as you are able. Consider starting at 7% of your gross income and put those dollars into index funds. When you buy an index fund, you are buying a slice of the whole market. While stock indexes, such as the;
- Dow Jones
- S&P 500
do contract, the general trend is growth in value over time. If your employer offers a match, do your best to contribute enough into your 401(k) to get the full value of the match, then use the matching money to buy individual stocks directly to build experience.
Look for a Long History
If you are thinking of picking individual stocks, look for companies with a strong history. Publicly held companies have benchmarks that they need to hit to make their investors happy, and if they do not, there is often a change in leadership. Study up on the CEO, the CFO and other leaders on the executive team. If a company is doing well and their leader is approaching retirement, there may be a bit of fluff or frothiness in the stock value at that time. When the new leader is in place it could be a great time to buy.
Review the Numbers
Carefully review the numbers and history of any company that you are considering investing in directly. For example, the Space Capital offer a dashboard for desktop and mobile. This dashboard can show you how dollars are being invested in these critical tech stocks. The collaboration of this industry is closely tied to businesses in the United States and China specifically and appears to be poised for future growth. Because numbers are the universal language, a great dashboard means that you can learn a lot about international investing even if you do not speak the language.
Think of Investing as Paying Yourself
Investing in the stock market, especially if you can do it with a savings vehicle sponsored by your employer, is the best way to pay your future self. To that end, remember that investing is a long-term activity. The money you put in the market now will not be available tomorrow, but the dollars you make on your investments today will go a long way to making your future much more enjoyable.
If you have just set up a brokerage account and are working to get started on your investment portfolio, do your best to set up an account that allows you to buy fractional shares. A fractional share is a slice of a stock. For example, as of July 2021, the parent company of Google has a value of over $2,500. However, if you can buy a fraction of one of those stocks, you can have a decent expectation of earning dollars on your investment. Be careful with any brokerage account and check the fees before signing up. Even if you are only buying a sliver of stock, you will still pay the full fee for each transaction.
Smart Investments Away from the Stock Market
Using money to make money is lovely, but if you are not careful with your other spending, your investments will never keep up. Make sure that you have money for emergencies. This can take time to build, so start small. Save up enough to cover groceries for a month, then build up to cover your utilities, your car payment, and then your rent. While experts recommend six months of savings, getting one month of rent stashed away will look a lot easier and get you started saving.
Investing can be daunting. By starting with index funds and experimenting with single stocks, you can learn what you need to know before you put dollars into any business. If data is hard to find, walk away and check out other industries.