Disclaimer: This is not financial advice, and I am not a licensed financial advisor. I’m only sharing some information on what has worked for me. This is not a suggestion for you to buy hold or sell any stock, ETF or index fund.
If you’ve ever thought about Investing or you just recently started investing hopefully this post will be of some help for you. I’m planning on adding to this post and adding new posts as time goes on.
First, there are some things to keep in mind when you’re just beginning because you’ll hear a lot of terms that may not make much sense.
- Trading and Investing – Yes, they both involve the purchase of stocks, and ETFS but there is a huge difference between the two so I will explain it here.
- Trading – There are two types of trading styles Day trading which is short term where transactions are bought and sold in the same day.
- Swing Trading – Stocks, ETFS etc. are bought and held for longer than one day. The stocks or ETFS can be held for a few days, weeks, or sometimes a few months.
- Long Term Investing is any stock or ETF that is held for 1 year or longer.
My Early Mistakes
- I did not know the difference between Trading and Investing. A lot of my early purchases in the first few months were made based on watching Day Traders. The purchase price can be at the high point, since they are shorting it, and can still sell for a profit.
- I had too many stocks in my portfolio. My first few months I had over 40 different stocks in one portfolio. Now I have less than 15 in a portfolio at any one time. Keeping a smaller number of investments in your portfolio is easier to manage and build up share sizes.
Some books to help on your Investing Journey:
Disclosure: As an Amazon Associate, I earn from qualifying purchases
Important Financial Terms
- Stock – A stock is a single company such as Apple, Microsoft, Sony, etc. (Had to add Sony this this is also a gaming blog and I’m a PlayStation user. I do own some Sony stock. 🙂
- ETF – An etf is a bundle or basket of many different stocks. ETFS can add diversity to your portfolio since it has shares of many different companies.
- Individual Cash Account – This is a taxable account. You can only make purchases with the amount of money that you have available in your account.
- Margin Account – You can make purchases that is more than the money than what you have available. This is where you have to be careful. Any purchase you make that is more than the money you deposited, is basically a loan from the broker. Brokers charge you interest on any amount that is deemed in Margin. Normally a Margin account is good for Swing Trading and Day trading. The reason for this is because Margin accounts have lighter trading rules. You can buy and sell a stock the same day. There is only a limit on the number of times in one day that you can do this. The term is called Pattern Day Trading rule or PDT.
That’s it for this post.
Watch out for future Investing posts from me and I hope that this information was helpful for you. Thanks so much for reading.
If you’re looking for a broker to open an account with Webull is what I use and I’m extremely happy with them. If you use my link, we’ll both get free shares when you sign up and make a deposit. https://a.webull.com/Tfjn4frF2sEBSe1whP
