Zhidian Business - Online Investing Guide
Whether you're nearing retirement age, striking out on your own, or anywhere in between, you need to think about your future finances. Once you begin thinking about it, you'll probably realize that you need to do something about it, but you won't know where to begin. This guide will help solve some of the mysteries of online investing.
The first step in investing online is to open an account with a broker. A brokerage account will allow you to buy stocks, mutual funds, bonds, and other investment products through a professional who buys and sells when you tell them to. You'll pay your broker a commission, which can be as low as five dollars, to several hundred. Prices can vary depending on the size of the trade and whether or not you hired a traditional or a discount broker. Traditional brokers provide more varied services, and they act as money managers and advisers. Discount brokers tailor their services to more experienced investors- they don't offer investment advice and they charge a lot less. Some firms offer both types of service, allowing you to choose which you need.
When you open a brokerage account, the minimum investment requirement can vary. It can be as low as $500, or even lower for investment, retirement and IRA account. Most brokerage accounts allow you to choose whether to apply through the mail, or online. The application process is fairly straightforward, and can be done at almost any bank.
If you are looking for a good discount broker, there are several firms like TD Waterhouse, Suretrade, eTrade, and Datek Online. Each of these choices has a relatively low commission, and their websites are easy to navigate. All of the above choices allow you to invest in common stocks and mutual funds; a plus for novice investors. Mutual funds are bond and stock collections under the direction of a money manager- for instance, if you want to invest in gas or oil but don't know which stocks to buy, you can buy mutual fund shares in those types of companies.
Once you open your brokerage account, you can start investing. All brokerage firms give you the option to set up recurring deposits, which transfer a specified amount each month from your checking or savings to your account with the firm. This is an easy way to begin building equity; if you never see the money, you can't spend it. Since you probably won't notice the deduction each month, saving will be a lot easier.
Above all, when you invest in an online brokerage account, you need to promise yourself that you won't withdraw it. If you sell your stock to finance purchases or pay off debt, you may regret it years down the road when the value of the stock goes through the roof. Remember- time is money, and good things come to those who wait!