There is no doubt that, with the right investment strategy, you can build an additional income stream, strengthen your finances, boost your retirement savings, and create the ultimate financial safety net for you and your family. 

However, unfortunately, the world of stock investing isn’t free of risks or pitfalls. From using an unreliable platform to choosing loser shares, investing in the stock market can be all the more challenging for first-time investors. 

The tips below can help you enjoy a more stress-free investing experience – and maximize your gains!

Determine Your Risk Tolerance and Investment Goals

Thanks to the availability of user-friendly brokerage accounts and trading platforms, the share of Americans investing in the stock market has been consistently rising over the past year. But while millions of people today invest in the stock market, no two investors have exactly the same needs, goals, and above all, risk tolerance. 

This awareness will guide you in the choice of the best approach to stock investing for your needs. 

Some of the options to consider include:

• Individually handpicking each stock by yourself 
• Working with an expert financial advisor, investment manager, or brokerage firm
• Using robo-advisors
• Signing up for a 401k with your employer

Pro tip – alongside the level of risk, be sure to understand how much hands-on work and knowledge of the industry each option requires!

Open an Investment Account That Suits Your Financial Goals

Once you are clear on the best approach for your needs, it’s time to open your investment account. While user-friendly investing platforms have made this step far easier than it used to be just a few years ago, not all options are created equal. 

Your financial advisor will help you determine the type of brokerage account that best suits your needs. 

However, some of the most common options include:

• Standard brokerage account (also known as a taxable brokerage account or non-retirement account)
• Individual retirement account (IRA)
• Roth IRA and other specialized IRAs such as SEP and SIMPLE IRAs)
• 401k plans
• Education savings account (i.e.: 529 savings plan)

Once you have chosen an investment account type, move on to finding a trading platform or app that allows you to open a secure and affordable account. Make sure to double-check the fees charged on your investments to avoid unpleasant surprises!

Consider Buying ETFs Instead of Individual Stocks

Researching and handpicking each individual stock to invest in can be a time- and labor-consuming task – especially if you have limited knowledge of an industry, sector, or the market as a whole!

That is why, instead of investing in a single company, you might consider finding an online investment app that allows you to invest in ETFs (Exchange Traded Funds) and other mutual funds such as Index funds. This investment option allows you to buy fractions of shares of multiple companies in a single transaction, thus minimizing risk and diversifying your portfolio. 

Set a Budget and Only Invest What You Are Comfortable Losing

If you are just getting started on your investing journey, you’ll need to be clear on the money that you should not invest. These assets include emergency funds, college funds, and savings accumulated for specific reasons, such as vacations and down payments – and they represent the ultimate safety net for your financial stability!

So, if these assets should be left in your savings account, what is your investable money? 

How much you’ll invest in stock will depend on factors such as your financial situation, risk tolerance, goals, and age. However, expert advisors recommend investing 10-15% of your annual income, especially if you are looking to build an individual retirement account.

Keep Your Portfolio Diversified – and Continue Investing!

Stocks are certainly a popular investment option – but they are not the only ones. Indeed, as you get older, you might have less time to ride through the ups and downs of the stock market. In this case, you might consider other investment options that are suitable for all ages, including real estate, high-yield savings accounts, and cryptocurrency. 

This strategy allows you to keep your portfolio diversified, minimize risk, and maximize gains. Don’t forget to continue investing to build wealth over time – and stay invested during a bear market!

Partner With a Specialized Advisor To Better Understand the Market

If you are just getting started in the world of stock investing, it can all feel overwhelming. That is where partnering with a specialized advisor can help you keep your portfolio diversified, understand the market, access valuable insights into rising and established companies, and avoid high-volatility stocks. 

Consider working with an advisor the first and most important investment you’ll make!