Playing the stock market sounds very dangerous to many people. For others, it’s simply a way of life. But is it a good way to make or save money? Well, this is certainly a higher-risk area to invest in than bonds, that’s for sure.
If you want to learn about the stock market, begin by doing some research before you actually begin to invest. What areas interest you the most? What are the established companies in that area, and what are their track records? What are the emerging companies or products in that area, and how well do you think that they will do in the long run?
Pretend to invest in the areas that interest you. If you’re looking for some security, create a virtual portfolio on your computer that contains conservative, slower-growth and consistent stocks like bank stocks or very well-established companies. If you’re looking to use this to pursue an interest, pretend to invest in emerging companies. This is more of a lottery approach: if you’ve done your research well and everything works out the way you think it will, you could earn a lot of money. If everything crashes, you could lose most of your investment. Of course, part of investing in stocks is that you will decide when you move into or pull out of a stock. Use this pretend investment time to figure out what makes you feel comfortable.
Set up an account with stock money, but keep this separate from your other investments. Use a small amount of money to start. Yes, you won’t make much, but you won’t lose a lot either. Over time, if this type of research-intensive investment suits you, you can move more money into stocks. If you discover that you don’t have the time or energy to invest in this way, at least you’ve tried.
Do you invest in stocks?