Investing 101 Series – Part 4: Brokerage Accounts
Now you have found a Company that you recognize is on the cutting edge of a new trend. How do you invest in the Company to make your investment? Open a brokerage account with one of the following online brokers: http://www.stocktrading.net
If you never have done this, it is not hard to do. There are some basic things to know which I will elaborate on. If you are serious about becoming a sophisticated investor, we recommend Fidelity because you will be able to grow with them and take advantage of their wide array of investment choices: mutual funds, stocks, bonds and ETF’s (Exchange traded funds).
Never act impulsively is the most important rule of investing. The art of investing is to think carefully and patiently. Investing requires clear thinking and a long-term horizon.
You are buying stock in a Company because you think what they are making or doing is cutting edge and is at the beginning of a prosperous future.
You should start your stock investment slowly and methodically. The old theory applies to this day, “never put all of your eggs in one basket”. If you like the Company, you can grow with it. Only invest what you can afford to lose. It is better to buy a few shares at a time and build your position in the stock to an affordable size to conform to the old theory stated above.
If you’re purchasing a $ 6.00 stock, begin with 100 shares. Each month, on the same day, buy another 100 shares until you reach an affordable size position (number of shares of ownership).
Never stop keeping up to date about the Company. Read all you can, and if you like what they say and see the growth and direction and agree with it, do not worry about the price fluctuations in the stock. You are investing in the future growth of the Company.
Always be on alert and watchful for the next trend in your travels, and the next Company with the new idea or discovery or better way to do things. Never invest in more than 5-6 stocks at a time and always have cash available for the next big opportunity.
Investing is both a skill and a discipline. It also requires patience and trying to keep emotions out of decisions.
In time, you can become as good as any investor by following these simple rules.
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MD Financial Solutions