How to start investing in Stocks

We previously introduced stocks as a class of investment security that you should consider for your portfolio. This post will zoom in on how you can get started investing in stocks.

Here’s the first thing, the stock market is not a casino. It’s not a bunch of green and red candlesticks. Behind the charts are companies operating in the real world. You need to understand the companies you want to invest in.

Work with a watch list

A watchlist is like a vision board for stocks you’d like to have in your portfolio. While there are ten thousands of stocks you can shop from; a watchlist helps your focus. Curating a watchlist will help clarify your thought process and 

You can select stocks from the big-wigs in the news like Tesla (TSLA) and Apple (APPL), or you can select stocks of companies in your field – media, oil & gas, technology, etc.

Work on your watchlist 

Here you’d have to evaluate your possible investment in the companies on your watchlist. The following questions can serve as a checklist:

  • Can you explain what the company does without ambiguity?
  • How do they make money?
  • What is their customer size?
  • Who are their competitors?
  • What is their market position?
  • Do you have faith in the company’s leadership?
  • Can you hold this stock for ten years?

Take the leap

After evaluating your options and building conviction about a particular stock, it is time to buy. Typically, retail investors could only buy shares with the aid of a traditional stockbroker who acts as an intermediary between you and the stock market. The stockbroker acts as the agency authorized to trade on your behalf. Advances in technology have seen this process’s automation and reduced the complexity to a  few clicks like Trove. Trove allows you to engage in fractional investing 

What is Fractional Investing?

Fractional investing enables investors to purchase stocks based on the amount they have rather than the total share price. Dividends are distributed in proportion to the share value bought. For instance, at the time of writing, 1 full share of Facebook (FB) costs $320, but fractional investing enables you to own 10% of this at about $32.

With Trove, you can purchase American, European, Chinese, and African stocks for as low as $10 right now.

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