Investing in the stock market is the single surefire way to build lifetime financial security. You can invest in stocks and ETFs to grow your wealth and earn passive income.
But many people find the stock market intimidating and scary, so they don’t invest at all!
How do I begin to invest in the stock market?
Investing in the stock market is actually much easier than you think. In order to get started investing in stocks, you only need two things:
- money to buy stocks
- an investment account to access the stock market
The best part? You can start with as little as $100 and you can choose an account that’s as hands-on or as automated as you want.
How much money do you need to invest in the stock market?
You need at least $100 to $1,000 to invest in the stock market. Some brokerages, like Wealthsimple Trade, will let you open an account with $0 but you can’t buy stocks with $0 so there’s no use to your account!
While you can get started in the stock market with a few dollars, the more money you have to invest, the better. Work hard to set aside the first $1,000 you need to get started investing, then set up a regular monthly or weekly contribution to your investment account to help it grow.
What can I invest in with $100?
Because many stocks have share prices greater than $100, that amount is not enough to really get a foothold in the stock market. Nevertheless, you can get started investing with as little as $100.
If you’re just starting out, the best way to begin investing is with a robo-advisor. Wealthsimple is far and away the best robo-advisor out there, so if you don’t yet have an account, now is the time to sign up!
You can read more in our Wealthsimple Review here.
What can I invest in with $1,000?
If you have $1,000 or more, you’re still probably better off starting with a robo-advisor but you can begin building your own self-directed investment portfolio if you’re really keen to do your own trading. Questrade is the best discount online broker because they charge the lowest fees which means you get to keep more of your returns!
If you choose to go with a self-directed broker like Questrade, you’ll have to choose your investments in your portfolio yourself.
You can read more in our Questrade Review here.
What are the best stocks to buy for beginners?
If you’re a new investor, buying stocks is more about building the foundation of your portfolio and getting a feeling for the stock market than trying to pick a winner.
Exchange-Traded Funds (ETFs)
Exchange-Traded Funds or ETFs are essential to any portfolio because they provide broad market diversification at a very low cost. An ETF is a collection of related investment securities, like a bunch of dividend-paying stocks or technology stocks. When you buy a share of an ETF, what you’re really buying is a tiny piece of dozens or hundreds of different companies.
Most robo-advisors actually build their portfolios out of ETFs. Exchange-Traded funds are the foundation of any robust investment portfolio. When selected ETFs of your own, look for broad market funds that invest in the whole US stock market, or even the whole global stock market.
Blue-Chip Dividend Payers
If you’ve already added some ETFs to your portfolio and are looking to buy some individual securities, your next best bet is blue-chip, dividend-paying stocks.
Blue-chip stocks belong to large, established companies that are listed in major indices like the S&P 500. These companies have survived market downturns and continue to provide products and services that consumers know and trust. Not all blue-chip stocks pay dividends, but most of them do. This makes these securities excellent long-term holds in your portfolio, as well as a source of passive income.
Is now a good time to invest in the stock market?
Yes! Believe it or not, it is always a good time to invest in the stock market.
Time in the market matters more than market timing. This means you’re better off getting started investing as soon as you can and staying invested over the long term, rather than put it off trying to time a market bottom to begin.
No matter what is going on in the world, you should keep calm and invest on. You should stick to a consistent investing strategy whether markets are going up or down. The best way to do this is to commit to buying a certain amount of investment securities every week or month, regardless what the market does.
Learn how to invest in stocks
Once you begin investing, it’s important to remember that you’ll always be learning more about the stock market. At no one point will you ever know everything you need to know about investing!
Make time to continuously improve your understanding about investment securities and the market by reading books, following the news, or taking courses.
After all, you’ll be managing your money your whole life so you should be learning about it your whole life too!