As a beginner, familiarizing yourself with the process of investing in stocks can be challenging. A variety of securities are available to consider, and no specific strategy or approach guarantees success. However, if you escape the constant chaos surrounding stock markets on a daily basis, you could miss out on the possibility of growing your money in the long run. Simply put, stocks can be daunting, and you need to exercise caution while investing, but ignoring them all together might hinder your chances to build savings in a big way.
Fortunately, you can discover new strategies that are much safer than the rest. While even "safe" stocks - typically said to be ideal for beginners - come with at least some probability of losing money, you can concentrate on purchasing ones that will lessen the risk while also offering you a much-needed introduction to the stock market.
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Investing in stocks is crucial, but it's also not wise to do so until the rest of your financial portfolio is in place. To fetch some long-term gains, you'll need to set aside an amount of money you're sure you won't require in the near future.
Get Rid of High-Interest Debt
There's no denying that the returns from the stock market can be great. However, over the long run, they're never going to exceed your credit cards' interest rates. Before you dive into investing, ensure any and all high-interest debt is paid.
Set Aside an Emergency Fund
Anything from a job loss to having a car break down can leave you in sudden dire financial straits. If your only solution is to sell your stocks, you might lose out on potential big gains, depending on the stock market timing and your emergency.
The thumb rule is you should have six months' worth of income set aside in an emergency fund so your short-term financial needs can be fulfilled without the need to sell off your stocks.
Pick a Stock Brokerage Account
To buy stocks, you'll need to sign up for brokerage services. There are several choices these days, like online brokerages that don't charge hefty fees. Then, there are apps like Robinhood that enable you to buy stocks without paying any commission. So, look around and compare the brokerages based on the tools they offer and the fees/commissions they charge.
