1. Choose the right brokerage service.
Before the era of internet, people needed to open an account with a brokerage and find brokers to invest in the stock market; however, people can invest thorough online brokerage services nowadays. There are hundreds of online brokerages out there and they all have different advantages and disadvantages. For example, “A” brokerage may not charge any transaction fees but will charge a monthly service fee, and “B” brokerage could charge you with a 5 dollars transaction fee every time you open or close a position. Therefore, it is important for the young investors to choose the right brokerage service that suits their investing habits.
2. Do not invest all your money into one single stock
It is very risky to invest all the money you have into one single stock. Stock itself is risky and unstable, even Warren Buffet can not predict the future of a stock. By investing all your money into a single stock, you could lose all your money very quickly, but you could also gain huge benefits of the stock soars.
3. Pay your taxes
Young investors often forget that they need to pay taxes for capital gains. The taxes are usually 15 percent of your gains; however, you can claim your losses if your losses are more than your earnings. Keep in mind that receiving dividends and owning fast-growing stocks also affect your tax paying, but your brokerage will help you with the tax matters.
4. Get ready to research
Investing in the companies you know is always the best option; however, doing deep research before you put your money in the market is highly recommended. Say you really like company “A” and you are using their products daily -- but what makes a stock grow is not about how well you know about their products. You should read the company’s related news and study their earnings report before you make any moves, because a famous company does not make it a growing company, and a growing company does not mean it is profiting company.
5. Don’t be stressed
Be prepared to the worst situation, and only invest the money you currently do not need. It is okay if your stock goes down, which is completely normal. If a stock keeps climbing everyday with no break at all, that is not normal. Last but not the least, we are millennials and we have the brightest future waiting ahead; at this point, investing in the stock market is only the first try.