How to get Started in Stock Investing
Educational Series
If you haven’t already, subscribe to our newsletter here to get our articles directly to your inbox and follow us on Twitter, Instagram, and YouTube! In our Educational Series we will be taking a deep dive into different ways to invest your money in hopes that one or multiple of these methods strikes you as interesting and encourages you to invest your money to grow your wealth.
Where do I even get started?
First to get started investing in stocks, you need to open a brokerage account. Granted some of you may already be investing in stocks but might not realize it yet. If you have a retirement account such as a 401k or some type of individual retirement account (IRA), but this is to help grow your wealth outside of your retirement accounts. This is said not to discredit retirement accounts as retirement accounts have a lot of benefits but we will write about that at a later time.
There are three different ways to get involved with stock investing outside of your retirement account: pay a financial advisor and give them money to open a brokerage, open an account with a robo-adviser, and open a brokerage account for yourself. There are many financial advisors out there and if you decide to go this route be sure to do your own due diligence prior to giving them your money. The pros to this method is you do not have to worry about it and you have someone managing it for you, but the cons are there fees for a financial advisors service. Many financial advisors promote their returns but do not take into account their fees associated with their returns and many of their investing strategies you can implement yourself with the right education! There are pros and cons of each strategy. The pros to having a physical investor are that you do not need to manage your investments, physical advisors can provide advice on all things related to money, and they have experience in the field. The cons are physical advisors are generally expensive, they add a human element into investing that you are not in control of, and their strategies are generally limited.
A robo-advisor is an application or brokerage account that has an automated system that allocates your money to different stocks, exchange-traded funds, index funds, and bonds. There are many robo-advisors, some of the popular applications are Acorns, Stash, and Beanstox. Both Brandon and Daniel have used Acorns to start and we were both pleased with the user experience. This is great for beginners because it is cheaper than a physical advisor and gives consistent returns. For a robo-advisor you can set up automatic deposits and generally you can determine your risk level and you have a few different options on the risk tolerance. The pros of using a robo-advisor are similar to physical advisors you do not need to manage, its automated so it does not require human intervention if you do not want it, and the fees are generally cheaper than a physical advisor. The cons of using a robo-advisor are the portfolios are limited, although it is cheaper than a physical advisor, robo-advisors still have fees, and the portfolios cannot be personalized.
The last option is to open a brokerage account and invest it yourself! In this last option you have the control and you can educate yourself! Some may be scared from this strategy initially, but the more you educate yourself the more you’ll understand what you’d like to invest your money in and how. There are pros and cons to each strategy. The pros to investing on your own are you have control of your investments, you have greater potential for your returns because you are in control of your investments, and there are no fees when you invest for yourself! The cons to investing is you may not have as much experience in the field so you may not feel confident yet, it takes time to educate yourself, and it is tough to keep your confidence when there’s downward movement in your portfolio.
Here at Green Candle Investments we plan on bringing you the tools to educate yourself to make a decision on how you’d like to invest your money. In the next few weeks we will be explaining the in’s and out’s of stock investing. Later we will be taking dives into the other three investing strategies we described in our previous article here.
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Disclosure:
The article was written by Daniel Kuhman and Brandon Keys, and it expresses the author's own opinions. The information presented in this article is for informational purposes only and in no way should be construed as financial advice or recommendation to buy or sell any stock, asset, or cryptocurrency. Brandon and Daniel are not financial advisors. We encourage all readers to do further research and do your own due diligence before making any investments.