Introduction to Investing

 

- Dr. Blake Rayfield

 

Follow along: https://blakerayfield.com/project/invest-intro/

 

 

What do you need to get started?

  • Investing now can be rewarding and can benefit you in the future.
  • You can get started investing with as little as $100
  • Most people get started by investing
    • Stocks
    • ETFs
    • or other equity based products.

Why start investing?

  • Investing is an acceptable way to grow extra cash.
  • Historically, the stock market has offered a larger return on capital than do bonds or other investments.
  • Short-term Investing (Cash Management):
    • Everyday cash management
    • Checking vs. Savings
  • Medium-term Investing:
    • Large Purchases
      • House
      • New Car
  • Long-term Investing:
    • Retirement

You have some extra cash... What's next?

  • For beginning investors, online brokerages offer an advantage over traditional platforms.

Choosing what you want to invest in

  • The hardest part for new investors. NYSE alone has more than 2,800 stocks
  • Think, "What will make this company more valuable?"
  • Don't sweat the small stuff.

Placing an order

  • After you have chosen a brokerage, you buy a stock
  • The bid price is what the last order was willing to buy apple for. The ask price is what people are willing to sell a stock for. A trade only occurs when one side meets the other.

Placing an order

  • You place a bid order, your order will be added to a queue. If someone places a similar ask order, the order will be filled. You have a stock!
  • However, if your order is too low, it can sit... forever...
  • What if you want it now?
    • A market order, will instruct the broker to purchase the stock at the best ask price.

Helpful Advice for Investing

  • Pay attention to the fees

    • Trading with a full brokerage can cost you a fee. These fees can add up and can erase any returns you may get. Try using a service or app like Robinhood when you get started investing.

  • Diversify you income

    • If you work at Papa John’s, don’t invest all you income in Papa John’s.

Helpful Advice for Investing

  • Think “Long-term

    • There is a reason why portfolio management is a full time job. You simply don’t have time to follow the news all day and trade. Choose value stocks, where your money will grow while you do you homework.

  • Don’t Ignore the Taxes

    • Taking advantage of tax-advantaged accounts like a 401(K) can boost your value.

Helpful Advice for Investing

  • Don’t gamble

    • One sure way to make sure your first investments are you last is to gamble. Your first investments should not be obscure stocks with unique business ideas. Stick to well known companies with business practices you believe in until you have the time to research other companies.

  • Try things you learn in school on your own portfolio

    • This stuff is not made up. Try it in real life sometime.

Helpful Advice for Investing

Helpful Advice for Investing

If you don't have money

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