Am a huge stock owner, do I know everything about the stock market, can I make you millions with $10? No, but I am just like you working a normal job(well sorta I’m a SAHM) making average pay and had no idea about the stock market. That’s the reason I believe I can not only help you understand it but, can get you excited to start investing. First lets dive into simple terminology that is used on wall street.
Stock is a representation of a piece of ownership one has in a company. Stock is what you buy on the market to have this ownership. Think of stock like an orange, you go to the market and you buy the fruit, once you make the purchase you own the orange.
Portfolio: A collection of investments owned by an investor. You can have as little as one stock in a portfolio to an infinite amount of stocks. When you start buying stock you then have a “portfolio”.
Broker: A person who buys or sells an investment for you in exchange for a fee (a commission). I will later on show you ways to buy stock without paying fees to a broker.
Initial Public Offering (IPO): The first sale or offering of a stock by a company to the public, rather than just being owned by private or inside investors. Whenever facebook decided to go public it was called an IPO, the “new kid on the block”
Rally: A rapid increase in the general price level of the market or of the price of a stock. Sometime certain events can cause the stock market to go up fast in a short time this is when a “rally” happens.
Sector: A group of stocks that are in the same business. An example would be the “Technology” sector including companies like Apple and Microsoft. A fancier way of saying category. Like retail is a “sector” that most investor are staying away from due to low sales.
Best graph for reference (image source)
Now this may seem like a lot of information at one time, but this is just the basics and you learn most of the definitions when you actually dive into investing. Now I have been investing for 2 years now, and I haven’t invested alot of money. However, I have gain a great return and I plan to increase every year. There are 2 ways I to go about investing, you can either spend the time and look deep into a stock you want to own. Or you can let someone create a portfolio of stocks they believe will earn you a great return. Well I tried both, and got different outcomes.
This app is AMAZING! I love it and always rave about it. It takes my spare cash rounds it up and deposits it into my portfolio. Where they have hand picked stocks and bonds for me. I don’t spend time looking for stock to own or what bonds to buy. This apps way of investing, is good for someone who wants to put there money on auto pilot. You will earn a return depending on the stock market and not have to worry about doing the heavy lifting. However, you don’t get to control what you own. So if you hate apple and would rather amazon or another stock you will not be able to change where your money goes. For those who like a certain company and want to pick where there investment goes I would recommend my next tip.
I’ve had this app for about 6 months. I own 5 stocks ranging in different sectors. I study which stocks to own, at what price to buy, and how long I should hold them. This way of investing takes more time, but if you are good at it you can make alot of money. It doesn’t take a warren buffet to know whats going to hit. My husband who doesn’t have a passion for investing picked a few stocks and some months they are outperforming the stocks I spent hours on studying. This app is easy to navigate, I was able to get my mom into it and she loves it.
I plan to keep both app, and increase the amount I invest in each year. My main focus is paying down debt but the interest rate on my car loan is 4%, while the money I have invest has yielded me over 11%. Just remember to keep a balance and take it slow. Don’t put all your eggs in 1 basket.
I handpicked, Target, Fitbit, Square, Phillips 66, Teladoc. Want to start investing use my link below to get $5 started in your acorns account.