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Help Investing in Stocks 2020: The Most Effective Approaches 24.06.2020

help investing in stocks

There are a few markets that have enormous volatility, and stocks are among them. Although stocks are risky assets, they attract traders and investors worldwide. There are a vast number of books, articles, and guides available – which can just end up confusing investors. To earn a profit, you should obtain reliable help with investing from an online broker. Before we move to the qualities of the best stockbrokers, let’s consider other options.

Robo-Advisor

Robot advisors became popular after the financial crisis of 2008. Their popularity grows daily, along with their accuracy. More and more companies program and use their robots to attract new clients. Relying on the Charles Schwab Corporation, an American multinational financial services company, the number of American Robo-users will surge by 58% by 2025. Aite Group predicts the number of people using robots while trading and investing will rise from about 2 million to 17 million by 2021.

At the same time, robots have some qualities that can become pitfalls for your professional growth as an investor.  

BenefitsDrawbacks

No feelings. Feelings are one of the most significant disadvantages of investors, especially of newbies. Greed, uncertainty, and fear can affect an investor’s decision. Robots give signals using unique algorithms, so market feelings don’t change their decisions.

Don’t feel the market mood. Although it might be an advantage that a Robo-advisor doesn’t have feelings, sometimes it’s crucial to feel the market sentiment, especially when trading or investing in a market with high volatility. It’s harder to apply formulas in times of significant fluctuations. Thus, when entering the stock market, it’s better to rely on professionals, not machines. 

No knowledge and experience required. Robots are widely used in different markets because they don’t require in-depth knowledge and previous experience.

No practice. If you aim to become a successful investor with in-depth knowledge of the market, robots won’t allow you to achieve it. Only your own mistakes will teach you. 

No responsibility. We believe this point is more a drawback than a benefit. Let’s look at a demo account, for instance. A demo account is a great option that allows investors to practice, gain experience, and test strategies. However, it doesn’t give them the real feelings they will experience when their money is at stake. This is the same with the Robo-advisor. It’s much easier to trade when someone makes the decisions for you. However, it restricts your participation in the process.

Guides and Books

It’s crucial to improve your knowledge and skills by reading and applying experts’ wisdom. Your experience will help you trade without others’ help, relying on your background and feelings. However, this option isn’t a comprehensive one. Educational materials may become a great helper in professional growth. Still, to become an expert and make the right decisions, you need to practice.

Benefits Drawbacks
 


Free. Fortunately, nowadays, we have the ability to find any information we need on the Internet. Free webinars, books, articles, and educational materials are all at our fingertips.  

No practice. Even if you read lots of materials, you won’t become a good investor without practice and professional help.   

Wide choice. Learning has become more comfortable as we have a wide range of materials to help us explore a new sphere.  

Difficult to choose. There are thousands of books and articles explaining different strategies, giving advice, and telling you how to trade. Nevertheless, to find reliable information, you need to know what is right and wrong.

Brokers

The easiest way to enter the stock market is to use brokerage services. Interest in stock investing grows continuously. Thus, demand breeds supply. However, not just any broker will fulfill your requirements. Let’s consider the factors that will help you to choose the best stock broker in the USA. 

Requirements for Stock Brokers

Know what you want. To choose the right broker, you need to know your goals. Firstly, determine the aim of investing (lots of investors save for retirement). Secondly, set a period. It can be either a short-term period (several years) or a long-term period (10-15 years). These questions will help you to understand what stockbroker account you need.

Trade or invest. Another essential point to understand is whether you want to invest or trade. These approaches are different. Investing is used to purchase assets and hold them for at least several years. Trading brings fast rewards, but it’s not a common way to invest for an extended period. Thus, you need to find a broker that will match your goals.

Type of broker. After you define your needs, you are ready to determine a stock broker for hire. There are two main types: full-service and discount. Full-service brokers are more expensive than discount ones as they provide a full range of services such as financial advice for every side of your life, including retirement and healthcare. Usually, the minimum size of the account is $25,000.

Discount brokers offer a more extensive range of options. Firstly, they allow you to make your own decisions regarding placing orders., they invent or buy Robo-advisors that ease the investing process. They also may give not only signals but educational information. And what is most important, the minimum deposit is really low.

Determine your level. The grade of your experience matters when choosing an online broker. Previously, we said you could use educational materials to improve your knowledge. However, a good broker provides educational materials too. Thus, no matter if you are a beginner or a professional, you can learn something new with your broker.

Stockbroker Platforms. A reliable broker should have a platform that works well in any version, whether it be via a mobile browser, a computer, or an app, as the main advantage of an online broker is its mobility.

Stockbroker fees. Stocks are not cheap. Just imagine that to buy one share of Berkshire Hathaway, you need approximately $272,000. Online brokers may provide leverage and accounts with a small deposit. It will allow you to invest even if you don’t have significant funds. However, before you open an account, read the terms and conditions carefully. Brokers take a commission for their services. Commission and fees vary significantly.

It seems it’s not easy to find a good broker. But believe that as soon as you succeed in it, your investing career will skyrocket. 

Benefits and Drawbacks

BenefitsDrawbacks


Accessibility. Although you can buy stocks directly from companies, it’s much easier to find a provider who will present your interests. On one platform, you have all your investments. Also, you can withdraw whenever you need it.

Fees. To earn money, brokers apply charges. 

Bonuses. Besides cash bonuses, you can get strong signals or advice and educational materials.

Low deposits. Although not all brokers offer low deposits, it’s possible to find those who do. Moreover, you can get leverage.

Freedom. When investing through a broker, you can choose assets yourself.

Stock Broker vs. Investment Banker

An investment banker is a professional who helps companies and individuals participate in huge deals such as mergers, sales, and security issuing. A broker is a bridge between the investor and the market. An investment banker is a professional helper who does the most significant part of the work for you.

Conclusion

stockbroker VS investment banker

To conclude, there are different types of stock investment help. However, online brokers are the most reliable and comprehensive. Brokers provide not only a platform for trading or investing, but also educational materials, financial advice, and Robo-services. They are responsible for your money. At the same time, it’s crucial to find a trustworthy brokerage firm. Remember that there are three essential qualities you should consider. They are a convenient platform, professional advice, and law control. Einvestment combines all of them. Start to invest with professionals. 

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Investing in Stocks: 101 20.06.2020

Investing is not scary or difficult if you understand it. First of all, you need to understand with whom you have to work: the market is full of unscrupulous brokers. We have collected the primary information and created a simple guide for beginners so that you can figure out everything.

Popular Misconceptions

There are many misconceptions about investing: fraud, lottery, too complex, a topic that requires specialized training, and huge start-up capital. Not really.

First, you need to find a good broker with a state license, learn how to balance risks, read financial news, and create an initial investment portfolio. This might seem complex, but we’ll break it down for you.

Recession, crises, and pandemics are major negative factors that stop investing.

According to the International Monetary Fund, we will experience the worst recession since the Great Depression this year: the global GDP will drop by 3%. Indeed, some companies already had hit their lowest level for the past 3-5 years, according to the Dow Jones Industrial Average

For earning money, you do not have to study each company’s details for the past ten years. Just start from simple stock investing in things you already know. For example, because of the customer shift this year, Adobe stock rose by 4%, with revenue of more than $3 billion.

When Lehman brothers were filing for bankruptcy in 2008-2009, Amazon grew its online sales by 29%. Lego moved to Asia and Europe and managed to increase its profits by 63%, giving hefty returns to its investors. These real examples prove: investing in crises can be practical and profitable.

After 2008, we already have learned that with a reasonable strategy, and with no panic, investors can earn good money. Each collapse is always followed by a recovery period, which is provided by exchanges and commodity instruments.

Follow Our  Easy Guide to Investing In Stocks

Let’s take a closer look on how to start your investing journey. 

Step 1: Choose How You Want to Invest in Stock

If you are  interested in choosing stocks and funds by yourself

This is a responsible choice, but it might not be right for beginners. New investors should suppress the desire to buy everything that has fallen in price. They should keep in mind that the risks of increased fluctuations in the markets under the crisis can remain relevant, which is why short-term purchases, especially for newcomers, are risky in such conditions.

If You know funds and stocks are a great investment but prefer someone to do it for you.

Choose the investment service, broker, or adviser who will evaluate your risks and satisfy your investing needs. If you are not sure where to start, try out our Einvestment platform for investing. It is a licensed, multi-portfolio investing platform with more than 200 years of experience from different advisers and professionals. 

We create an individual plan for each customer based on their needs and acceptable risks. Your strategy and goals may differ when you are in your 20s, 30s, 40s, and even 60s (such as retirement plans), but our plan will grow with you – which is just one of the many benefits of using an investment platform for beginners.  

Step 2: Open an Investing Account 

Currently, the market is offering accounts with a broker or with a Robo-adviser account. 

With a broker, you can open an individual retirement account or a taxable brokerage account if you are already saving somewhere.

Robo-advisers were popular a couple of years ago. Currently, their prices have risen, but their analysis during crises is poorly designed. Broker accounts are safer during a pandemic, as the deals are analyzed by a person, not a robot.

Step 3: Choose between Investing in Mutual Funds or Individual Stocks during a Financial Crisis

Most people in the stock market choose between investing in mutual funds and individual stocks. Mutual funds allow you to buy a part of different stocks, which provides more diversity to your portfolio. If you like a single company, you can buy a couple of shares or a single share of it. 

As a beginner, try both. If you invest in an individual stock, do not jump too fast from one company’s share to another. 

Mutual funds are less risky and less likely to rise as individual stocks. Indeed, for the individual stocks, be prepared to invest and leave it alone for a couple of years to see real results. Jumping from stock to stock will not increase your assets. One great example can be Apple- Ronald Wayne might still regret it. 

Step 4: Allocate a Budget and Investing Limits

When you start investing, prepare emotionally and physically for the amount of money you are ready to lose. Many beginners fail to control their emotions. Ask yourself what your emotional tolerance is. 

Generally, the middle-age investor has 80% of their portfolio in stock funds; the rest would be the bond funds. The minimum amount to invest for an individual stock depends on the company you are interested in. We recommend investing no more than 10% in it. 

Note, if, during a financial crisis or pandemic, one company keeps losing its market share, even during the recovery, it might not go up. J.Crew, Gold’s Gym, and Diamond Offshore Drilling have already filed chapter 11 for bankruptcy this year.

Stage 5: Start Investing 

To become an investor, you have to invest. Learning all about bonds and stocks does not provide experience. Knowledge is power, but holding on to money and waiting for an economic upswing is not the right idea. At the end of the day, inflation may reach you, and you will lose more.

We suggest using your short-run individual funds to invest in a company that you are relatively confident about, or see the potential in. 

Conclusion

All of the guidelines listed above are dedicated to beginners who are hesitant about investing. We believe, everyone should invest in stocks, no matter what the state of the economy is. Beginners can start from low-cost mutual funds, as it does not require big assets, and it does not have high risks.

The most important rule is to establish emotional barriers, decide your risk tolerance, and seek an adviser. Nowadays, there are many online platforms that allow you to invest during a pandemic. 

Even during a crisis, it is not about how the investors fall, but how they bounce back. You can rely on this simple guide for investing, no matter what economic conditions bring you.

Good luck!

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