Financial Planning

Investing for the future is one of the best things you can do for yourself and your future. Investing allows you to build your wealth over time. Having money for retirement will allow you to retire on time, possibly early, and live a comfortable, stress-free retirement. Do not rely on social security or a small pension. Buying stocks online is a very easy way to build a diversified portfolio that will safely earn you money.

If you are young, starting now is a great way to have more for retirement, but this doesn’t mean you are ever too old to start investing. Take the time to learn the ropes of investing and start right away. Save money and make life easier by investing online.

Step 1: Research and Choose your Investments

Building a diversified, well-researched portfolio is very important. Instead of putting all your money into one or two companies, try diversified means of investing. Mutual funds and exchange traded funds, known as ETFs, are both great ways to diversify with minimal research on your part.

A mutual fund is a mix of investments bought by investors who pool their money together. Mutual funds are often used for retirement accounts such as IRAs and 401Ks. ETFs are very similar except that they are traded on an exchange. You can look at the history of the fund, the investments and types of securities included, and it’s performance to help you conduct the necessary research to decide on the best fund.

You do not need to invest in a lot of different mutual funds or ETFs because they are diversified automatically, but including a variety is a great way to reduce risk. Keep a small portion of your portfolio in gold mutual funds or ETFs for a hedge to increase your return and stay diversified. Investing in gold a great way to diversify into other securities such as commodities.

Step 2: Find a Stock Broker

Once you have chosen your investments and have money ready to invest, you will need to find a stock broker. You can’t physical purchase stock by yourself which is why you will need a stock broker from a brokerage firm to do it for you.

There are a lot of great online brokerage firms. Each firm varies in the quality of their research tools, commission fees, and products offered. Before choosing a firm, consider what you’re looking for very carefully. Instead of going with the first firm you see, look at a few of the best firms and compare them to each other. Read reviews from other investors. Make an educated choice in order to maximize your returns and make investing as easy as possible. Not all online brokerage firms are created equally, and some are more established than others. Don’t make a rushed decision.

Step 3: Fund your Account

Once you have set up your account with the brokerage firm, you will need to add money to your account before you can start buying securities. Using an online firm is easy because you can connect your bank account right to your broker for easy funding. Consistently add money to your account so that you always have cash on hand for new securities and automatic investments.

Step 4: Buy Investments

At this point, you should have a funded account set up and a list of investments to purchase. Now it’s as easy as buying those investments. You can purchase your investments a few different ways. A limit order is the best way to make sure you get the best price. When you buy, you want to get the lowest price possible to increase your earnings. A stop limit order set at a certain price will allow you to buy the security once it reaches a certain price. Be realistic when you set your stop limit order to ensure you will get the security you want.

Continue Investing with Automatic Investments

Investing is not a one time thing. It’s not as simple as buying securities, and forgetting about them. Investing is an ongoing process to keep up with. This doesn’t mean watching your investments everyday, but you should keep an eye on them. Watch them to avoid future losses. Also, continue to look around and research other securities for future investments.

Automatic investing is a great way to get in the habit of investing. You can set up automatic investments with your online broker which will automatically buy new securities for you. For example, you can set it up to buy 10 shares a month of the ETF you currently own or other investments. This way, you can’t forget to invest more, and you will continue to build up the value of your portfolio over time. Reaching your investment goals will be easier as you make a habit of regular investing.

If you’re interested in learning more about automatic investing, ten don’t forget to check out our guide to learning how to save money automatically. If you want to see which online stock broker I use, check out the guide on the best online stock brokers.