Ever watched Wolf of Wall Street? I am sure you have heard about Jordan Belfort and his Wall Street operation. It is fair to say that Hollywood has ushered in new era of investor fame and has influenced thousands of hard-working individuals to invest their money. However, do you even know how to invest? This is a quick article that will highlight three important aspects of investing in the stock market.
1. Invest in Mutual Funds
With more than half of U.S. households invested in the stock market, it is safe to say that people clearly care about overall stock market performance. If you are new to investing, then you should start by investing in mutual funds, which are essentially a compilation of stocks that track a specific market index or industry. For example, the DFA US Large Company Portfolio (DFUSX) is a mutual fund that tracks the S&P 500 and invests 95% of funds in stocks that fall within this index.
The premise is simple. Mutual funds allow investors to diversify their holdings, mitigate risk, and still outperform the broader stock market. As an actively traded investment asset, mutual funds are able to trade stock market outbreaks. So, if you are a new investor then you absolutely need top invest in mutual funds. Simple contribute money each month to your specific mutual fund, sit back, and watch your investment compound over-time.
2. Employ a Long-Term Mindset
Investing is not a quick get rich scheme. The best investors are persistent, remain invested, and continue to re-invest their earnings year after year. As famed investor and author Robert Kiyosaki teaches, 99% of the world work for their money while the mega-rich let their money work for them!
Here is how it works, the longer you remain invested in the stock market, the more time your money has to compound, which after all, is the eighth wonder of the world according to Albert Einstein. Before you begin to invest, make sure you employ a long-term mindset. With a long-term mindset, you do not need to worry about the all-time highs and all-time lows the market constantly endures. The stock market always trends up and to the right, so the longer you remain invested the more money you will make overtime. It is that simple!
3. Choose a Low-Fee Broker
To this day, investors continue to choose brokerages that charge high fees for investing in the stock market. Fortunately, the digital age has ushered in a new era, an era that is dominated by low-fees and ease of access. There are now mobile investing apps that charge zero-commissions, provide ample investment research, and in some cases, ‘hold your hand’ as you learn the ins and outs of investing.
Starting with an investment app is what we recommend. It gives you a good introduction to investing and allows you to try it out. Besides, if you are like most people, you have a full-time job and do not have time to constantly log into a computer to check your investments. A mobile app allows you to check your investments at anytime from anywhere.
Wrapping Up: Investing For Dummies
As you can see, investing does not need to be hard. First, choose a low-fee brokerage, employ a long-term mindset, and invest in mutual funds. This is a winning formula to help you compound your net worth, make money, and achieve financial independence. This strategy is used by Wall Street veterans, Warren Buffet, and countless of others who rely on the stock market to enjoy a financially safe and secure retirement.