Stock Series #31DaysofInvesting
by S Beez on Dec 08, 2020
People have been asking for a stock investing resource and with the #31DaysofInvesting challenge kicking off, I feel like this is the perfect time for me to provide you with this information.
The #31DaysofInvesting challenge was created by Hugo (@logical_el), the same person who created Stack Season. He is challenging us to invest every day of December (go into January if you are starting now).
So let’s get into the first topic in this Stock Series, Investing 101.
Stock investing may be intimidating to you to starting out, so I want to break down the basics.
Stock investing is when you purchase shares of a company or ETF through a stock brokerage. A stock brokerage is firm that allows you to buy and sell stocks. You need to open a brokerage account to begin investing in stocks. Most brokerages have low minimums to open an account $10+.
Before you start investing here are some rules that I suggest you follow.
Investing Rules to Live By
- Do not invest money that you aren’t willing to lose
- Always do your own research (DYOR) , do not buy stocks/invest blindly
- Invest what you are comfortable with, every dollar counts
- Stocks aren’t “too expensive”, you can buy fractional shares and reap the benefits of investing.
- “Be fearful when others are greedy” - Warren Buffet
- Stick to your plan and do what works best for you (buy and hold vs trading)
You may already be familiar with stock brokerages. Most millennials have heard of the trading platform Robinhood that allows you to trade from your phone with no fees. Robinhood is what you call a trading brokerage. Trading brokerages allow you to buy or sell stocks on the New York Stock Exchange. Some brokerages allow you to trade penny stocks which are called Over the Counter (OTCs) stocks. TD Ameritrade allow you to trade stocks on the NYSE and OTCs. I do not advise anyone to play with OTCs unless you are an experienced trader.
Most penny stocks are pump and dumps, which means that people buy millions of shares then tell their trading group or talk about it online to make you buy into the penny stock. When a rush of people FOMO into a penny stock the stock can gain 2x-10x the value. Once the stock rises in value the people with the millions of shares sell the stock and you are left with a worthless stock and have lost your money.
Penny stocks seem very enticing, but it is best to stay away from them completely.
Let me get into a few of the commonly used stock brokerages
- Free easy to use trading app with no fees that also has a web application
- Extended trading hours from 4AM-9:30AM and 4PM-8PM
- Web application allows paper trading for practicing
- Good for trading stocks/options and buy and holding
- Receive 4 free stocks when you sign up (2 stocks for opening the account , 2 stocks when you fund with $100). Click here to sign up
- Best platform for buy and hold investing through fractional shares. (My favorite buy and hold platform)
- Allows you to easily make a portfolio and buy fractional shares
- Best platform for dividend reinvesting (DRIP)
- Have to learn how to use the pie style of investing but I created a free M1 guide that gives you step by step instructions and teaches you how to retire with a million dollars. Click here to get my free M1 Investing Guide
- Receive a free $10 to invest with after funding the account with $100. Click here to sign up for M1 Finance
- Most commonly used by experienced investors
- Free Trading platform called ThinkorSwim that allows paper trading, stock trading, options trading, advanced chart analysis and free education (BEST TRADING PLATFORM)
- Platform not as user friendly, takes some time to learn
- Easy to use mobile app that also has a desktop version
- Better for buy and holding, app can be laggy for day trading
- Fractional Shares investing
- Receive 1 free stock when you sign up . Click here to receive 1 free stock
- Most well known stock brokerage, known for administering 401K plans.
- Free trading with no fees
- Fractional share investing
Make sure that you create strong passwords and use 2FA to secure you stock account. If you want to learn more about keeping your accounts secure check out my blog post.
If you are ready to dive in to learn more information about stocks on your own I suggest that you read these books.
Stock Investing Books for Beginners
- A Beginner’s Guide to the Stock Market by Matthew R Kratter – amazon link
- The Simple Path to Wealth by J.L Collins – amazon link
- The Intelligent Investor by Benjamin Graham – amazon link
This wraps up the first post of my Stock Investing series, next I will be discussing the types of stock investment vehicles (Shares, ETFs, REITs), retirement accounts, investment strategies (buy and hold, dividend investing, trading), and free resources to learn.
RESOURCES FROM BEEZ