What’s one of the best ways to achieve FIRE (financial independence, retire early)? By building a portfolio of long-term investments through investing in the stock market.
In this article, we’ll help you learn how to invest in stocks by teaching you investing basics and showing you exactly how to get started in the stock market.
Before you start, understand this: It requires patience, a long-term mindset and a thorough understanding of investing fundamentals. This article will teach you how to invest in stocks with 5 easy steps — to set you up for financial success.
Online casino players are discovering a new avenue for investment as they delve into the world of stocks. With their expertise in gambling and the allure of no deposit casino bonus, these players are finding ways to channel their risk-taking nature into the stock market. The skills honed from playing online casinos, such as analyzing odds and making strategic decisions, can be transferred to investing in stocks, providing an exciting new challenge.
One reason why online casino players are drawn to investing is the potential for high returns. Just like in gambling, where a single lucky hand can lead to massive winnings, wise investment decisions can result in substantial profits. Moreover, some online casinos offer no deposit casino bonuses that enable players to play without risking their own money. This bonus culture has created a mindset among gamblers that taking risks can lead to rewards – a concept easily transferable to stock trading.
To Show You Why Investing Is Important, I’ll Give You Two Scenarios:
Scenario #1: Say you invest $10,000 into the stock market and contribute an additional $1,000 each year. Your total capital will grow to ~$476,302 at the end of 40 years (assuming you earn the stock market average return of ~8% per year).
Result: Your total investments of $50,000 will have grown over 9x.
Scenario #2: You invest $0 into the stock market and contribute an additional $0 each year. Your total capital will have grown to ~$0 by the end of 40 years.
Result: Your investment will have grown by a total of 0.
Investing creates future opportunities. It helps you save for big purchases (e.g. house, car), gives you the option to retire earlier or creates an additional income source. Now, why should you invest? To create opportunities, build your wealth, and so you don’t end up in scenario 2.
Formula 1 stars Daniel Ricciardo and Nyck de Vries are proving their financial prowess by making smart investments in equities. As both drivers have achieved great success on the race track, it is no surprise that they are also excelling in the world of finance, also watch – VIDEO: Ricciardo Emulates de Vries with Silverstone Spin. Ricciardo, known for his aggressive driving style and infectious smile, has recently revealed his portfolio includes shares in various tech companies such as Apple and Tesla. Similarly, de Vries, a rising star in the sport, has diversified his investments with holdings in renewable energy companies like NextEra Energy.
These Formula 1 stars’ choice to invest in equities demonstrates their understanding of long-term wealth creation strategies. By investing in well-established tech giants like Apple and Tesla, Ricciardo is capitalizing on the ever-growing demand for innovative technology products around the globe.
1. Understanding Your Investment Horizon
The investment horizon is the amount of time an individual expects to hold an investment before cashing out. i.e. if you’re planning on buying a house in 5 years and hope to pull your money out for a down payment, 5 years will be your investment horizon. Determining your investment horizon is an important decision that impacts the types of investments you buy and the level of risk you take.
Stocks are highly volatile, and markets are prone to sudden crashes that could take years to recover. For example, in 2007, the stock market crashed and lost over 50%. It took over 3 years before the market recovered to its pre-crash value. As a result, it might not be wise to decide for someone looking to retire in 2 years to put all their money into risky investments.
The SPY index, a good representation of America’s stock market performance.
What Is Your Investment Horizon?
Short-Term Horizon Period (1–3 years) — These investors are better off putting their money in lower-risk investments with a more significant portion in guaranteed assets (e.g. low yield bonds, high-interest savings accounts, certificates of deposits, or lower risk bonds and stocks).
Medium-Term Horizon Period (3–10 years) — These investors can afford to choose investments with higher risk (e.g. bonds and stocks).
Long-term horizon period (10+ years) — These investors can afford to put their money into bonds and stocks with a higher allocation towards stocks.
PRO TIP:You should look to sell part of or all of your investments before the end of your investment horizon period. When learning how to invest in stocks, it’s often good practice to sell your riskier investments, which have greater short-term price changes, even earlier.