So you finally decided to start investing!

A man with a stack of dollar bills saying,

Investing in a stock can be a tough decision. With so many stocks to choose from, how do you find one worth buying?

A woman saying,

Determine Your Goals

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Everyone's reason for investing is to make more money — aka a return — but not every investor is looking to achieve the same thing with their money.

For example:

  • Younger investors want to increase their money as much as possible over a longer period of time

  • Older investors want to protect their money to avoid losses

A host of Shark Tank taking notes

Defining your investment goals will help you look for the right stocks that meet your needs.

Do Your Homework!

Stocks are an ownership stake in a company. When you buy a stock, you actually become an owner of a small percentage of the company.

Jessica Alba on a late night show saying,

Before buying any stocks, research several companies to understand what they do.

Ask yourself:

  • What field or market is the company in?

  • How long has it been around?

  • How successful has it been?

  • Does it make a lot of products that people purchase?

Understanding the basics of a company can help you figure out if investing in the business will offer you good returns or protect you from losing money.

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Tip: You use dozens of products daily, so take the time to consider the companies behind them.

Would investing in these companies help meet your goals?

Quiz

What should you consider before buying a stock?

Potential for gains & losses

The company's past & present performance

The company's future outlook

All of these

Keep It Simple

A man in a lab coat saying,

Start slowly by buying one or two stocks. Monitor these stocks and learn from how they perform.

Understanding these patterns will allow you to anticipate the right move to make with those stocks. Then, you can start to add more stocks.

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Stay On Course

GIF by bubly

Be disciplined and consistent!

  • Continue to make your regular contributions and monitor your investments

  • If necessary, make slight changes based on the performance of your stocks and changing market conditions

  • Make sure you understand any new investments you're considering

Happy Birthday Pig GIF by Angry Birds

Stay motivated!

  • Taking full control of your own investments can help you to stay committed in the long run...and have a lot of fun, too!

  • You can also save money on broker fees

Scenario: Andrew's Investment

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After extensive research, Andrew decided to buy his first stock in a company that he values and trusts. Andrew has been monitoring his stock for quite some time and notices that his investment is bringing him some decent returns.

What should Andrew do next?

A. Sell his current stock and look into buying even better stocks

B. Continue to monitor his current stock and look into buying additional stocks

C. Put all of his money into his current stock

D. All of these

Quiz

What should Andrew do?

A

B

C

D

There Are No Guarantees

Flaticon IconIt's important to understand that even your best strategy can still produce losses.

The reality of investing is that both markets and stocks rise and fall. No investment ever completely ensures you'll make money.

If you decide that choosing your own stocks isn’t for you, try a robo-advisor instead.

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What's a robo-advisor?

  • An automated investing service that uses computer algorithms and software to manage your investment portfolio

  • It collects information about your financial goals and situation, and uses that information to offer advice and automatically invest your assets

Take Action

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If you aren’t ready to invest any real money just yet, try a stock simulator:

  • It imitates real-life scenarios of the stock market

  • You can use pretend money to "buy" stocks and test the world of investing without any of the risk

  • It'll help you to determine how you'd react if this were your real money on the line

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This Byte has been authored by

CT

Christina Tec

Instructional Designer | eLearning Development