You do not have to be the guru of Wall Street or Warren Buffer to build a balanced portfolio that gives you profit over the long run. In fact, all it takes is a little bit of due diligence and taking some risk to build a balanced stock portfolio.
These days, it has become easy to start investing in the stock market with as little as $100, and over time, you can build your portfolio to a sizeable amount.
Why Invest In Stocks?
When you buy shares of a company such as Apple, Google, or Starbucks, it gives you ownership of that company. And once you own a piece of any company (let's stay Starbucks), then the good performance of that company will also help you earn money.
When a company performs well and makes money, it increases its share price - So, let's say that you bought ABC company stock at $47, and after 2-3 months, its stock rises to $55. With this price increase, you just earned $8 per share, and if you had 1000 shares of that company, your profit would be $80,000!
How To Invest In Stocks
So are you ready to invest in stocks and make some money? Then follow the steps given below:
The first step is planning, which involves finding good stocks to add to your portfolio. When looking at the potential stock, look at the company's profitability, expenses, and past performance.
Good companies will have a good trading history and will be profitable as well. Another factor to check is the market capitalization of that company which is the sum of how much money is invested in that company right now. Popular companies such as Google, Apple, and Facebook usually have market caps of billions of dollars & are thus more stable than the companies with small market caps.
The next step is doing your research to find out when it is the right time and price to buy that particular stock. You would be surprised to know that buying the stock at a good price is also a very important part of the equation and can dictate how much money you can make as well.
Do not put all of your money into 1 stock and go for diversification. This means that you should invest in multiple stocks from different sectors of the market to build a balanced portfolio and reduce risk!