Jan 4, 2020

Invest in Equity Markets

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←Older revision Revision as of 00:20, 5 January 2020
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Liquid error: wrong number of arguments (given 1, expected 2)Liquid error: wrong number of arguments (given 1, expected 2)Liquid error: wrong number of arguments (given 1, expected 2)There are many mainstream institutions that participate in the business of buying and selling securities via the internet that are used mainly for less savvy investors (the general public). This is usually done on a low-cost basis per trade and the securities are chosen by the individual. The two main services that allow this is an app called Robinhood. These two main services allow people to buy and sell securities online with low fees and no middle man to facilitate those trades. In order to start investing one must know their financial health and the monthly funds that they are willing to allocate to their investment portfolio. Thus this instruction is split into two parts. The first part consists of calculating your net worth and your monthly investment budget. The second part consisting of different investment strategies that are available.
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Liquid error: wrong number of arguments (given 1, expected 2)Liquid error: wrong number of arguments (given 1, expected 2)There are many mainstream institutions that participate in the business of buying and selling securities via the internet that are used mainly for less savvy investors (the general public). This is usually done on a low-cost basis per trade and the securities are chosen by the individual. The two main services that allow this is an app called Robinhood. These two main services allow people to buy and sell securities online with low fees and no middle man to facilitate those trades. In order to start investing one must know their financial health and the monthly funds that they are willing to allocate to their investment portfolio. Thus this instruction is split into two parts. The first part consists of calculating your net worth and your monthly investment budget. The second part consisting of different investment strategies that are available.
 
[[Category:Investments and Trading]]
 
[[Category:Investments and Trading]]
   
 
==Steps==
 
==Steps==
===Calculating your net worth and monthly investment budget===
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===Calculating Your Net Worth And Monthly investment budget===
#Setting up a net worth statement and calculating your monthly investment budget requires creating a checklist and using basic mathematic formulas to calculate your monthly investment budget.  
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Setup a net worth statement and calculating your monthly investment budget requires creating a checklist and using basic mathematic formulas to calculate your monthly investment budget.  
 
#List your assets, estimate the market value of your hard assets, and add up the total. Assets may include things like:  
 
#List your assets, estimate the market value of your hard assets, and add up the total. Assets may include things like:  
 
#*Cash balance in your bank account
 
#*Cash balance in your bank account
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#*Utilities
 
#*Utilities
 
#*Student Loans
 
#*Student Loans
#Calculate your monthly balance. Monthly balance = Income – Expenses. Once you have a surplus, decide how much you want to save and how much you want to invest. All investments guru follow the 50/30/20 rule. Which says 50% of your income must be spent in fixed costs (i.e. paying the bills), the 30% should be held in cash at the bank(this is also called discretionary money) and the remaining 20% must be used for investment activities. Calculate these percentages accordingly and develop a plan that works best for you. Once a monthly investment is calculated, now begin deploying that money into various investment vehicles using multiple techniques.  
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#Calculate your monthly balance. Monthly balance = Income – Expenses. Once you have a surplus, decide how much you want to save and how much you want to invest. All investments guru follow the 50/30/20 rule. Which says 50% of your income must be spent in fixed costs (i.e. paying the bills), the 30% should be held in cash at the bank(this is also called discretionary money) and the remaining 20% must be used for investment activities.  
Note: Your expenses should not exceed your monthly income. If it does  
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#*Calculate these percentages accordingly and develop a plan that works best for you. Once a monthly investment is calculated, now begin deploying that money into various investment vehicles using multiple techniques. Note: Your expenses should not exceed your monthly income. If it does investment in the stock market is not right for you.
investment in the stock market is not right for you.
 
   
 
===Online Investments===
 
===Online Investments===
 
#First navigate to the service providers sign up page. Find an online service provider that has the capability to buy and sell securities. Examples of this are Robinhood and TD Ameritrade.  Here you will provide some basic information’s like your name, email address to create a username and password for that account. At this point, you will have to enter your contact information. This consists of personal information which consists of mail address, residential address, and your personal phone number  
 
#First navigate to the service providers sign up page. Find an online service provider that has the capability to buy and sell securities. Examples of this are Robinhood and TD Ameritrade.  Here you will provide some basic information’s like your name, email address to create a username and password for that account. At this point, you will have to enter your contact information. This consists of personal information which consists of mail address, residential address, and your personal phone number  
#Verify your identity. This is the second step that the service providers will ask you. This is a crucial step as you're dealing with financial matters. All service providers in this industry are required by law to collect SSN numbers to prevent misuse and financial fraud. In this step, you will also be asked to provide your citizenship and marital status. You will have to provide bank information details in order to fund your brokerage account. You will have to link your bank's route, and account number to the service provider in order to purchase securities. Some service providers will also have minimum funds required in the account as well. Submit the application, and wait for the approval. This can be an instant / same day approval or can take 5 business days depending upon the service provider.  
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#Verify your identity. This is the second step that the service providers will ask you. This is a crucial step as you're dealing with financial matters. All service providers in this industry are required by law to collect SSN numbers to prevent misuse and financial fraud. In this step, you will also be asked to provide your citizenship and marital status. You will have to provide bank information details in order to fund your brokerage account.  
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#*Link  your bank's route, and account number to the service provider in order to purchase securities. Some service providers will also have minimum funds required in the account as well. Submit the application, and wait for the approval. This can be an instant / same day approval or can take 5 business days depending upon the service provider.  
 
#Start investing your hard-earned money in equities, once the account is created. Select which company you want to invest in and note down its ticker symbol. A ticker symbol is a unique abbreviation of a  company that is listed on the stock market. Note before investing in any company study the fundamentals of the company and be familiar with its business model.  
 
#Start investing your hard-earned money in equities, once the account is created. Select which company you want to invest in and note down its ticker symbol. A ticker symbol is a unique abbreviation of a  company that is listed on the stock market. Note before investing in any company study the fundamentals of the company and be familiar with its business model.  
 
#Select your ticker symbol and enter the number of shares or the dollar amount you want to buy of the company. Once the buy command is executed, be sure to save all information regarding this purchase in a safe folder on your computer. This information can come handy during tax seasons to disclose your financial holdings or capital gains from this particular stock.  
 
#Select your ticker symbol and enter the number of shares or the dollar amount you want to buy of the company. Once the buy command is executed, be sure to save all information regarding this purchase in a safe folder on your computer. This information can come handy during tax seasons to disclose your financial holdings or capital gains from this particular stock.  
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#Repeat the above steps (3-5) to trade securities in the equity markets over and over again provided that your basic information is accurate, and all the guidelines for trading securities as laid out by the securities and exchange commissions are followed.
 
#Repeat the above steps (3-5) to trade securities in the equity markets over and over again provided that your basic information is accurate, and all the guidelines for trading securities as laid out by the securities and exchange commissions are followed.
   
===Investing through funds or different basket of funds===
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===Investing Through Funds Or Different Basket Of Funds===
#Investing your money through funds means putting your money in a mutual or an index fund. A mutual fund is a professionally managed investment fund that pools money from many investors to buy and trade securities. An index fund is a subset of a mutual fund that is designed to follow preset rules so that the fund can track a basket of underlying securities. This means that index funds have different baskets (industries) that track the movement of stocks in a particular industry. Mutual funds demand a higher fee structure and usually demand investors who can stomach a higher risk in return for a higher reward. Below are the common steps in order to achieve this goal.  
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# Keep in mind : investing your money through funds means putting your money in a mutual or an index fund. A mutual fund is a professionally managed investment fund that pools money from many investors to buy and trade securities. An index fund is a subset of a mutual fund that is designed to follow preset rules so that the fund can track a basket of underlying securities.  
#The first step is to decide if you want to be part of an active or a passive fund. An actively managed funds are funds that are managed by professionals who research what is out there and buy with a goal of beating the average market returns. This demands a higher fee structure. A passively managed fund is a hands-off approached investment. This involves investing money in an index fund that allocates money to several companies in a single basket.  
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#*This means that index funds have different baskets (industries) that track the movement of stocks in a particular industry. Mutual funds demand a higher fee structure and usually demand investors who can stomach a higher risk in return for a higher reward. Below are the common steps in order to achieve this goal.  
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# Decide if you want to be part of an active or a passive fund. An actively managed funds are funds that are managed by professionals who research what is out there and buy with a goal of beating the average market returns. This demands a higher fee structure.A passively managed fund is a hands-off approached investment. This involves investing money in an index fund that allocates money to several companies in a single basket.  
 
#Calculate your investment budget. This calculation was shown in part 1. Most mutual fund brokers do require a minimum amount of $500 to invest. A good investment rule to follow is that the budget allocated for mutual fund investment should make you feel comfortable to leave the money untouched for at least three to five consecutive years to see significant growth in your holdings.  
 
#Calculate your investment budget. This calculation was shown in part 1. Most mutual fund brokers do require a minimum amount of $500 to invest. A good investment rule to follow is that the budget allocated for mutual fund investment should make you feel comfortable to leave the money untouched for at least three to five consecutive years to see significant growth in your holdings.  
#Decide where you want to buy your mutual funds from. This can be a boutique investment shop, a mutual fund division offered by your bank or an online division that offers mutual fund services. Understand and calculate the fee structure for your investment scenario. If possible try to negotiate it. This is a very crucial step as your returns can be high but your net gains can be low due to the fees that have to be paid for in return for your capital management. If your starting out try to find a broker who can offer you a no-transaction-fee mutual fund account.  
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#Decide where you want to buy your mutual funds from. This can be a boutique investment shop, a mutual fund division offered by your bank or an online division that offers mutual fund services. Understand and calculate the fee structure for your investment scenario. If possible try to negotiate it.  
#Once decided on your investment plan, build and manage your portfolio. Be active participants in your fund, to notice any discrepancies in what was promised and what has been achieved. During this processing shop for other funds as well so you can diversify your investments during a time of crisis.
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#*This is a very crucial step as your returns can be high but your net gains can be low due to the fees that have to be paid for in return for your capital management. If your starting out try to find a broker who can offer you a no-transaction-fee mutual fund account.  
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# Build and manage your portfolio. Be active participants in your fund, to notice any discrepancies in what was promised and what has been achieved. During this processing shop for other funds as well so you can diversify your investments during a time of crisis.
   
 
==Tips==
 
==Tips==
*The buy/sell orders work best during trading times, in your local stock market. For ease of use, I will be referring to the New York stock market which follows EST time zones.
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*The buy/sell orders work best during trading times, in your local stock market. For ease of use it will be referred to the New York stock market which follows EST time zones.
   
 
==Warnings==
 
==Warnings==


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