How to Invest

Investing is a simple process but knowing where to start can be confusing. Beginning to invest can seem daunting to new investors so we aim to make it simple for you to know how to invest.

Getting started in the stock market is easy. All it requires is a broker, an account and then your investments. That is all, and you can start as soon as you are ready. Before you do invest however, you should ensure you are prepared. Make sure you are in a position to invest and have considered as many factors (What factors to consider when investing) which could affect your investing journey. When you feel you are ready, then here’s what you need do to start investing.

How to invest:

Choose a broker

A broker allows you a platform to be have access to investing. The broker facilitates the ability to invest in the stock market, by completing the trades for you. In order to start you need to choose a broker to be able to buy (and sell) stocks and shares. There are a number of ways to access a broker to choose from:

  • Stockbroker
  • Brokerage firm
    • Online platforms
    • Apps

More than likely, you will choose the latter options as online is arguably the most convenient and simplest way to get started. You will then want to consider which broker it is you choose. There are many brokers and brokerage firms to choose from. However actually choosing one may be difficult.

Every broker has unique features and ways to suit each individual investor. For example, they may have different trading and usage fees, different availability of stocks and shares, different budgeting and minimum investing requirements and different accounts too.

There are a whole number of factors which may affect your choice. There may even be other considerations not listed which affect you when it comes to selecting. You should therefore do your research and decide on one which suits your investing needs. After all you will likely be involved with them long term, so you should take as much time as necessary to choose the right one for you.

Choose an investment account

Once you have your broker, you will then need to choose which investment account is right for you. Each broker offers different accounts, so it is important to consider what fits you. Some examples of investment accounts are:

  • Tax Free Accounts
  • General Stocks and Shares Accounts
  • Pension Accounts

These are just some of the accounts available. In reality there are many accounts, all which serve a specific purpose, and so offer different qualities for the user. When choosing your account, you should decide one which is suitable to your needs. Your goals, involvement, timescale are amongst some of the factors which you should think about as you choose your account.

Arguably you are better off going for tax free accounts to begin with as you get the most benefit from your potential returns. As with the broker, do your research and find the right account for you. It will be your long-term investing account and so it will pay to make sure it provides exactly what you need.

Choose your investments

Finally, you will need to choose your investments. The most difficult part about learning how to invest is to actually choose what you wish to put your money in to. Being involved in the stock market gives the option of being able to invest in thousands of companies amongst other things. So, where do you even start.

Choosing the right investment is hard. You will want to consider if it matches your level of risk, the rewards you seek from your investment, your goals, your time frame and so on. In other words, you will want to choose investments which are suitable for you.

When you have an idea of the investments you wish to put your money towards, you will want to try and discover if they are good investments. You should aim to put together a story about a company on why it is a good investment. This could mean identifying their finances, their business practices, their product or service, their management and so on. Essentially you want to identify what is good about the business and why they are worthy of your money. Once you feel you have found the right investment for you, then you simply need to add money to your account through your broker, choose your investments and you are good to go.

In short…

Investing is a simple process and learning how to invest may be a lot easier than you might think. Essentially you need to follow the following steps:

  1. Choose a broker
  2. Choose an account
  3. Choose your investments

Once you have done this, you have begun your investing journey, and could be creating a brighter future for yourself.


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