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How to Invest In Stocks: Fundamentals for Beginners

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StrategyDriven Practices for Professionals Article | Investing in the Stock Market | How to Invest In Stocks: Fundamentals for BeginnersFinancial uncertainty plagues the lives of individuals and small business owners alike. Having some cash on the side and wanting them to produce more in the long term is usually a great idea. Nevertheless, choosing between a bank deposit and stock investments may be a hard option for those knowing close to nothing about stocks. Today, we will offer a detailed guide on how to invest in stocks and the fundamentals you have to cover before expecting to get rich while following trends in commodities.

1. Decide on Your Investment Style

If you already know about stocks and you survey some promising companies (usually, big names in the technology sector attract new investors the most), you can take a DIY approach. Typically, you need a brokering company to offer its assistance.

The best stockbrokers should offer you a reasonable minimum for your account, reliable and proficient trading tools, and, most importantly, no hidden fees and taxes, and excellent customer service.

In case you are the type of investor knowing about stocks but having no idea how to proceed further, you may want to pick a managed account – hire a broker to do the work for you. Such services require minimum efforts from your part, but they do not come cheap. Reflect on your goals and make the best decision depending on the time, energy, money, and skills you are willing to give to this investment venture.

2. Understand the Differences between Stocks

A sensitive area where investors need help is differentiating between multiple types of stock-based investments.

Buying Individual Stocks

One of the first rules when you learn how to invest in stocks is to decide what you want: short-term trades that may boost your finances in 2-3 months, or long-term stock investments in companies active in what we call “forever businesses” that you hold on to for decades. A more conservative investor will choose to buy stocks on the long term from companies that are more likely to hold their ground for years to come despite market turmoil (think Amazon, since we already mentioned tech companies).

When you buy individual stocks, it means that you purchase a single share or a few shares of a specific company, one that you trust and believe will grow over the years or the next few months. Of course, seasoned investors buy shares of multiple companies, diversifying their portfolio, but you need quite the capital (shares range from a few bucks to thousands of dollars).

Investing in Mutual Funds or Index Funds

Mutual funds allow you to buy small pieces of many different stocks in a single trade. Index funds and ETFs track specific companies or entire industries. For instance, NASDAQ, while covering plenty of sectors, is one of the best trackers of tech companies. The DAX 30 in Germany tracks the 30 most valuable companies in the country (and worldwide, since they are all global brands).

Trading indices require knowledge and experience, but your chosen brokering company can teach you how to employ the best strategies. Nevertheless, making a direct investment in a mutual fund comes with inherent diversification – meaning fewer risks for you. Mutual funds are the haven for those thinking about retiring – while they do not make people fabulously wealthy overnight, they offer slow and steady gains in the long run.

3. Research the Company Thoroughly

Sure, you heard Amazon, Alphabet, and Netflix are good investments, but why are they so? Before you begin buying individual stocks in a particular company, you should engage in thorough research months before you make the actual investment. You can use a stock price prediction tool to guide you in choosing a company to invest in. Here are some things you need to consider:

  • The company’s income statement, balance sheet, and cash flow statement; if you do not have direct access to such documents, your broker will fill in the gaps with information.
  • The latest company annual report and the letter from the Chairman. This document gives you a solid knowledge of the company and offers you insights on the trends and strategies the company will follow next. Some of the best written such letters are those of Warren Buffet. His shareholders know what to expect and what to do.
  • Check out the company’s press in the last six months. When it comes to shares, bad publicity is awful news for investors. On the contrary, extended media coverage of the upcoming revolutionary company’s product can lead to unprecedented spikes in share price.
  • Statistics on share prices, market ups and downs, stock dips and meteoric rises, resilience on both bull and bear markets, and so on for the past 5 to 10 years. Such information is almost impossible to digest, but most companies offer such data in palatable formats. Your broker will be of massive help at this stage.

4. Understand your Budget

Opening an investment account is usually a straightforward deal. Budgeting that account, nonetheless, is something you need to consider thoroughly. As we said before, shares can cost a few dollars up to a few thousand dollars (or EUR if you focus on European companies or indices).

  • ETFs are the best choice if you want to invest in mutual funds, but you do not have a robust budget.
  • Talk to your broker about trading on CDFs and learn more about indexes – while you need to master some special scalping or day-trading skills, such approaches may prove more profitable than buying stocks and forgetting you have them for 40 years.

Conclusion

Some investors are comfortable with significant degrees of risk, while others prefer a “quieter” way to make money in the long run, taking the safer, more conservative path. If the kids’ college fund or your retirement plan are your main goals, mutual funds are usually a good way to go about stocks. If you aim for profits by taking advantage of the market itself or the price differences between stocks, you should have a long discussion with a broker about trading.

Expert Advice For A More Organized Home Office

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There are many small business owners that choose to work from home. The obvious benefit to this is that you save tonnes on office expenses. However, it’s easy for a home office to become disorganized and full of clutter. When your workspace becomes messy, it can lead to a drop in productivity. So, it’s crucial you know how to keep your home office as organized as possible.

Expert Advice For A More Organized Home Office
Photo courtesy of Pixabay

Utilize Your Desk

All home offices are going to have a desk for you to work on. If you want your office to be neat and tidy, then you need a desk with storage compartments. If should have some drawers or a little cabinet. The reason you need this is so you can keep lots of items in there and out of sight. Instead of filling up your desk with stationary, it can all be stored in a drawer. Some desks come with a shelf underneath to put a printer too. Again, this helps keep things off your worktop. By getting a great desk, you can use it to make your office completely clutter free. The result is that you have a clean and clear workstation at all times.

Sort Out Your Mail

Businesses tend to generate lots of mail on a daily basis. When you’re trying to work from home, your office can get overloaded with lots of letters, etc. Having so many bits of paper lying around can get distressing and make you very unorganized. To solve this problem you have two potential solutions. Firstly, you can completely get rid of your mail. Sites like physicaladdress.com allow you to get your postal mail delivered elsewhere. Once delivered, it’s scanned and sent to an online mailbox, meaning no loose paper in your office. Of course, this idea isn’t for everyone; some people like to have physical copies of their mail. So, you need to focus on keeping your mail nice and tidy. Sort through it and store important stuff in a mail tray. Anything you don’t need can be shredded. You’ll still have to deal with mail being delivered to you, but your office will be far more organized.

Expert Advice For A More Organized Home Office
Photo courtesy of Pixabay

Try And Keep Things Digital

These days, technology is taking over every aspect of our lives. Some people are worried about this, but I think we need to embrace it. One of the best things about modern technology is that it one device can do so much. For example, a tablet can tell you the time, let you make bookings on a calendar and so much more. As a result, you can keep a small home office far more organized if you have one. A tablet will replace a physical calendar, notepads, etc. You’ll have less stuff in your office, which will keep it in place and free from any mess & clutter. If you’re interested in a business tablet, then check out comparative reviews on sites like Laptop.com.

If you want your small business to grow and develop, then you need a comfortable working environment. It’s impossible to achieve this if your home office isn’t organized. Follow this advice and you’ll be on the path to success.

Recommended New Year’s Resolutions for Entrepreneurs

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With 2013 winding down, it’s time to start thinking of ways to change, or improve, for the New Year. As the New Year approaches, here are a few New Year’s resolutions and recommendations for the entrepreneur:

As an entrepreneur:

  1. Hire Great People: Continue to try to hire great people so I can focus on my primary roles.
  2. Reduce Email Lists: Reduce the number of email lists I’m on for both business and personal.
  3. Less Stress: Stress less over the minor problems and remember that perfection is impossible.

Recommendations:

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About the Author

Michael Unetich is President of TIP Solutions, a Chicago-based software company building a patented set of software and firmware technologies around call handling and management. He started several successful entrepreneurial ventures, possesses experience in software design and marketing, and has extensive experience in angel investing. Michael is a named inventor on over 10 patents currently under USPTO and international filing.

Tribal or Transformational? How to grow your startup when new business rolls in

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Startup CEOs need to know how to act once they realize that a new revenue stream is growing faster than the original business concept. You’re faced with a choice: transforming the business you created or launching a new, separate venture. I call it the choice between going “tribal” (creating a new tribe – a distinct group that acts independently from your core business) or “transformational” (transforming the current team and business).

As CEO and founder of two of the fastest growing digital advertising companies in the country, I’ve had to make that decision twice. We used the tribal concept when we created a new video-focused advertising company, AdKarma. When we decided to transform our original digital advertising business, we tried to use the transformational model. But after meeting internal resistance, we integrated elements of going tribal to create a new company, Division-D.

In the end, we considered three essential questions to help us choose the right road for our future:

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About the Author

Bobby CampbellBobby Campbell is a successful entrepreneur with a deep understanding of how to monetize emerging digital markets. He’s CEO and founder of several leading digital media companies including 3 Interactive, AdKarma, and Division D. Campbell graduated from the University of Missouri with a degree in Creative Writing and Political Science. You can follow him on Twitter @BobbyAdkarma.