Investing in the stock market comes with both risks and rewards. You could have a great investment that can make you a lot of money, or you could have a bad investment that results in you losing money.
If you are new to investing in the stock market, it’s a good idea to start small. It’s better to get yourself comfortable with the stock market and your investments first before diving in head first and losing everything. If you’re considering investing in the stock market, the following are three reasons you should start small with online investing.
1. Starting small allows you to get comfortable with your broker.
When you invest in the stock market, you will need to work with a stock broker to help you make smart investments and answer any stock market questions you may have. When you start small, you have the opportunity to get to know your financial advisor and your broker. You can see how they operate with your money, how they treat you as a customer and determine your comfort level with them. You can then use this information to determine if he or she is the right individual to handle a larger sum of your money, or if you should find another broker to handle your investments.
2. Starting small allows you to get comfortable with the investment tools.
When you invest online, you will have access to different tools and resources. When you make a small initial investment, you will have the ability to get comfortable with the investment tools without risking too much. For example, you will be able to get comfortable with the online trading website and any other tools it may offer. If you use NeoTrade as your online investment tool, you will have the ability to learn how to use the site as well as how to use the NeoTrade mobile platform, which is available on both Google Play and iTunes. You will then be able to learn the ins and outs of the tools so that you can make smarter moves when you’re ready to make larger investments.
3. Starting small allows you to decrease the risk.
Investing in the stock market requires a great deal of learning, and when you’re new to the stock market game, you need to learn how to invest in the stock market wisely. By starting small, you decrease the risk of losing a fortune. Instead, starting small allows you to get comfortable with the different stocks and how to make smart investment decisions. You can see how your investments are doing, and then use this information to determine how to make larger investments in the future. If you find that your initial small investments are doing so well, you will have learned your investment lessons without losing all of your money. Then, when you make larger investments, you can use this information to make smarter decisions so that you end up gaining more money than you lose.
Brian says
It’s always good to kick off with a smaller investment if possible– it’s ideal in investing situations to test the waters in any way you can so as to get a realistic idea of how your time and money will be spent. Great article.
moneystepper says
Agreed – its always best to learn the ropes with less at risk. Usually, this tends to be the way people get involved, but isn’t always the case for people who receive large inheritances or other unexpected windfalls at a young age…
Thomas @ i need money ASAP! says
This is why its important to start investing early. The more experience you have the easier it will be to weather those ups and downs later on when your portfolio is larger.
Fig @ Figuring Money Out says
Totally agree with going this route! It’s not as intimidating and way less risky to start small with investing. If it’s an option it’s really nice for people to start early and young.
Steven @ Buyingstocks.info says
Starting small is surely the right approach to investing in the stock market. Investing in the stock market is “high risk” but if we stick to companies having strong fundamentals, diversify our investment portfolio, and go for the long run (stay the course) then we can reduce the amount of risk exposure.