21,917 views

Almost all adults that have retired and managed to get a reasonable net worth that allows them to live a decent life have accumulated that wealth by investing in the stock market. When it comes to stock investment, the earlier you start the better off you will be in the future. Time is the most important part of building wealth but how do you get started in the first place?

Choose a Broker

The first step is to choose a broker. This means that you need to look at commissions and what kind of investment tools they offer. If you want to make the most out of your stock investment, you need to look for brokers that have very low commission and fees and that offer access to multiple markets. You will want to have access to index funds, individual stocks, international markets, bonds, commodities, and other types of securities.

Choose a Strategy

For many, investing in the stock market can be intimidating. For the longest time, the stock market seemed welcoming only for smart money. You, the retail investor, had very little power and access to securities. Things have changed. However, if you do not want to be bothered with making financial analyses by yourself and looking at individual stocks, you can invest in index funds. Index funds are difficult to beat in terms of performance. Investing in something like the S&P 500 will net you an average yield of 10% per year. This means that you double your money every 7 years. If you do like to get down to the nitty-gritty, you can invest in individual stocks. However, your stock investment portfolio needs to be diversified.

Arm Yourself With Patience

If you want to focus on building wealth, think long-term and avoid speculative investment. In the stock market, the reward has a tight relationship with risk. If you see an opportunity for the stock to grow exponentially, the risk is equally high. Companies that experience slow growth are considered less risky. Over time, established companies with strong financials will continue growing despite experiencing some degree of volatility. All you need for your stock investment portfolio is patience and a strong will to avoid impulse buying and selling.