Doing something you have never done before can be quite intimidating. Buying stocks for the first time is no different, especially because it is your money you are handing over and risking. No matter what age you are, investing is something you have to push yourself to do.
Oh, the act of opening a stock account is easy enough, and sending in your money to fund it is as simple as putting a check in the mail or getting your bank to wire the money into your broker account. If you have problems with either of these steps, most online discount brokers have a live chat feature to help you out.
But once you open and fund your account, then you might hit a roadblock of indecision. I remember years ago I signed into my first ever online stock account everyday just to make sure the money was still there. Never hurts to check! But even though the money is there and waiting to be used, you might not be ready to pull the lever and buy your first stock. That’s okay, take your time.
Also, once you have an account with a broker, all sorts of new research and information screens open up and become available. For a first time investor, all that information is most likely overwhelming and can be paralyzing. Do you really need all that stuff just to find a stock that is going to go up rather than down?
Picking Your First Stock
You might have gotten interested in the stock market because you have a particular stock in mind. I think that happened with Facebook stock in 2012 as many first timers used the website everyday and understood what the company did. They also didn’t want to miss out on the next big thing and so they made Facebook their first stock to own. Unfortunately that IPO didn’t turn out too well and many young investors might have lost money after giving up on the stock as it continued to go down.
Apple is another stock that gets a lot of attention from the media and interest from investing novices. People want to make money and a stock that goes both up and down fast (as Apple has) gets prospective investors interested.
If you open your first stock account intending to buy a particular stock, go ahead and do it. Don’t second guess yourself. I say that because no matter whether that particular stock ends up going up or down, you will have gotten your feet wet and learned what it is like to own a stock. Everyone has to start somewhere and buying your first stock is most definitely a learning experience.
Make sure you don’t put all your money in that first stock either. If you only have $500 in your account then maybe buying just one stock is alright as $500 isn’t very much in today’s dollars. But if you fund your account with $2000 or more, try to keep some extra available to buy another stock with. Diversity is important in stock investing. Ideally, you never want to have all your money in one stock.
Patience And My $150,000 Portfolio
I’ve opened up an account with TD Ameritrade in late August of 2013. That is what this website is about: showing you what stocks I buy and sell in my $150,000 portfolio and trying to get younger people interested in the stock market.
You can imagine my desire to get things going and start buying stocks!
However, I had to be PATIENT and you should too when you first start buying stocks. There is no rush and no need to jump in, even though you might want to. Whenever you start investing, there are a lot of things that might worry you about the stock market including:
1) Potential wars or unrest around the world
2) The Federal Reserve might be raising interest rates or cutting back on a stimulus.
3) The stock market might be at a historical high or in the midst of a sell off that might make you wonder if it could be the wrong time to start buying stocks for the first time.
These “events” can be a great cause of concern and so you might want to be cautious when investing that money. I chose to choose what stocks to buy over a 6 month to a year period rather than buying stocks with it all at once. There is no need to throw it all at the market right away.
Buying stocks is something you should do over your whole life span. I know I will be doing it all the way up to and past retirement. It is the best way to grow your money and make your money work for you. Especially now in these days of extremely low interest rates.