How To Get Started Investing

Investing in the stock market these days can be risky. In this current market, even the savviest of investors are struggling at times to pick and choose the right stock to invest in.

If you are someone that is new to the market and looking to invest, just getting started can feel overwhelming. While there are many brokerages and web services available to help you navigate the stock market, there are also some things that you can do on your own to learn more about the market and get more comfortable with investing.

Decide How Much You Are Willing To Invest

Before you can even think about investing or deciding what stock to invest in, you first have to decide how much money you are willing to invest, and, more importantly, how much you are willing to lose.

There’s no such thing as a sure thing, especially when it comes to the stock market. So not only do you need to come up with a budget for how much you are willing to invest, but you also need to decide what your risk tolerance level is too.

The amount you are willing to invest will play a role in the type of return you are able to expect. A smaller investment might require more risk-taking in order to see the return you are looking for.

Pick Companies You Are Interested In Investing In

If there is a product that you have used or a company that you are familiar with, chances are they are publicly traded and can be invested in.

When choosing stocks to invest in, many people think about products or companies that they use and know. They do this because there is already a trust level there since they use the product or service and are familiar with the company.

So, if you aren’t sure where to begin, think about some of the products and services you regularly use and the company that produces them.

Get Your Research Materials Together

Once you have your list together of the stocks you are interested in investing in, the next step is to get all your research materials together.

The easiest way to do this is to review the company’s financials. Doing this is called quantitative research. In order to do this, you can put together all the documents that the company is required to file with the Securities and Exchange Commission (SEC) as part of being a publicly traded company.

The two main reports that you can access via the SEC are Form 10-K and Form 10-Q.

Form 10-K provides an annual report that has key financial statements. These statements have been independently audited as well. The annual report will provide info on the company’s balance sheet as well as how it handles its cash flow and its main source of income. You can also learn about its revenues and expenses.

Form 10-Q is a quarterly update report that shares info on the company’s operations as well as its financial results.

To access both the 10-K and 10-Q forms, you can visit the SEC’s Electronic Data Gathering, Analysis, and Retrieval website.

Narrow Your Focus

After you have gathered all the important information that you need from your research, you will want to narrow down your lists of stocks.

You will want to focus on only the strongest of the stocks on your list based on the following criteria:

• Revenue
• Net income
• Earnings and earnings per share
• Price-earnings ratio
• Return on equity and Return on assets

Start Investing

Once you have done all the research and settled on the stock or stocks that you want to invest in, the final step is to make the investment. There are many brokerage firms and investing apps available for you to choose from when it comes to making your investments.

Much in the same way you did your research when it came to deciding on the stocks you wanted to invest in, it’s important to also do the research when it comes to deciding the best brokerage or investment app that fits you and your needs.

Companies like NerdWallet and Business Insider, and Modest Money have compiled extensive reviews on a number of great online brokerages and investing apps for beginners so that you can make the best decision.

Want More Information Before You Start Investing?

If you are still unsure about how to get started or want the advice of professionals, many online brokerages and investing apps offer coaching as well as access to market professionals. You can access those services on their website or in their app. Some of these services are free and some might come with a fee or might require you to sign up for one of their membership plans.