Investing is easier than you think. 

Though the stock market might look monolithic, you can start trading in a matter of minutes.  It’s true. You can open a brokerage account with just a few clicks. You won’t have to pay any fees. 

And most importantly, you don’t even need a large budget to begin. As you get started, be sure to keep the old adage in mind: “The journey of a thousand miles begins with a single step.”  When it comes to stock trading, that first step starts by establishing your investment philosophy. 

Note: the following tips do not constitute official investment advice and are instead commonly-held facts about entering the market. For specific advice on individual stocks, be sure to contact a financial advisor.

1. Establish Your Investing Philosophy 

Maybe you’re investing to curb the effects of inflation on your purchasing power. Maybe you recently watched The Big Short, or read about the action at Robinhood and want to see what the fuss is all about.

Or, maybe you just want to make money.

Whatever your reasons for entering the market, it’s important to name them and establish a framework for your investing approach. Let’s be honest: you’re not here to buy and hold mutual funds. You’re here to trade, and as such, you need to set your own ground rules. Investing, after all, can be highly emotional. The market is not a meritocracy, and losses are inevitable. 

By developing your investing philosophy, you set three key parameters:

• First, you narrow your focus to a select amount of individual stocks. As such, you dedicate the time and attention necessary to understanding those specific companies and their product offerings. In other words, invest in what you know. As acclaimed investor and philanthropist Peter Lynch put it, “Behind every stock is a company. Find out what it’s doing.”
  
• Then, you decide how much money you want to invest. In other words, you set your budget. The market will quickly reveal the companies within your price range. As you’ll see, share prices can vary from a few dollars each to a few thousand dollars.
  
• Finally, you set your entry and exit points — the price at which you buy or sell a security. By developing an entry and exit point strategy, you insulate yourself from emotions and practice the classic “buy low, sell high” investment approach. 

All money managers and financial advisors have an investment philosophy. But while they advertise their ethos’s on their websites and marketing materials, your investment philosophy is solely for your edification. Take your time in developing your game plan. Articulate your goals, set your entry and exit points, and move forward with confidence. 

2. Select a Broker

When it comes to selecting an investment account, you have plenty of options to consider. For starters, there are investment accounts offered by the major brokers like Fidelity, Charles Schwab, E*Trade and TD Ameritrade. Then, there are newer, mobile-based stock trading platforms like Robinhood and Webull, which many active investors prefer. 

Note: All of the brokers listed above offer commission-free trading. Generally speaking, there should never be any fees or minimum deposits required to open a brokerage account.

Though most vendors deliver the same fundamental services, they differ slightly in terms of educational tools, features, and resources. Plus, some brokers also have physical branch networks, which may be valuable in our increasingly digital economy. Be sure to carefully research each vendor, and if possible, try a demo version of their trading platform before you make your choice. 

Note: After you select a broker, you’ll need to choose the type of investment account to open. For active traders, a taxable account will be the best option. For investors focused on long-term goals, tax-advantaged retirement accounts may be a compelling alternative. 

You can also manage multiple accounts. By keeping a regular taxable account and IRA brokerage account, you’ll have the best of both worlds. 

3. Choose Your Stocks 

Now it’s time to invest. Here’s the good news: you’ve already done the heavy lifting. You determined your investing goals, you identified companies you’re interested in owning, and you set your entry and exit points. 

As you get started, keep these three tips in mind:

• Start slow. Stick to your budget, and pick one or two stocks to tip your toe in the water.
  Remember, this is a marathon, not a sprint.
  
• Over time, seek to diversify your portfolio. By owning a variety of companies, you reduce your overall level of risk exposure.
  
• Knowledge is power, so never stop learning. Enjoy your wins, and learn from your losses. Investing is a lifelong education, so be sure to take advantage of any books, podcasts, and seminars that might expand your perspective. You can also dedicate time to studying popular valuation tactics, like price-to-earnings (P/E) ratios, price-to-book (P/B) ratios, and dividend yield.

Ultimately, the longer you spend in the market, the more refined your judgments and analyses will become. Enjoy the journey.

Monitor Your Investment (With Real-Time Alerts)

Investing has a low barrier to entry. With a small budget, a brokerage account, and a bit of careful research, you can enter the market in a matter of minutes. Ultimately, consistency and strategy are defining traits of any successful, enduring trader. While patience is paramount, timing is everything. Modern traders must know when to buy, when to hold, and when to sell — especially in our fast-paced and unpredictable economy. 

That’s exactly where RiskAlert™ can help. By monitoring your investments around the clock, RiskAlert™ will text or email you when your investments fall below your established risk tolerance percentage. These alerts don’t come hours, days, or weeks after the fact. 

Instead, RiskAlert™ reaches you in real time — so you can decide to buy, sell, or hold when it matters most. And because RiskAlert™ is a totally independent monitoring tool, you can use it with any trading platform or money manager.

Invest with confidence, and reap rewards with RiskAlert™. 

Click here to learn more!

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, investment or accounting advice. You should consult your own tax, legal, investment and accounting advisors before engaging in any transaction.