This is a sponsored post; however, all opinions are my own. Read the full CFO disclosure policy here.
When I was a teenager, my dad gave me a couple of books by Peter Lynch, who was famous for his success as a fund manager at Fidelity. His books were my introduction to investing in stocks, which back then seemed like an almost magical way of making money: Buy the right stock at a low price, sell it at a high price, and make a fortune.
Of course, it’s not that easy, or at least, it’s not that easy to find “the right stock.” In fact, it’s almost impossible for the average investor. That’s why experts recommend investing in mutual funds, which spread your money out across multiple stocks – they reduce your risk of loss, and increase the likelihood that you’ll actually make money. Mutual funds probably won’t make you a fortune, but they do have their place in every investor’s portfolio.
Back when I was a teenager, though, mutual funds weren’t touted quite the way they are now. It would have been very tempting to invest in individual stocks, if it hadn’t been so complicated. Back then, you had to open an account with a brokerage by filling out and sending in paper forms (or going in person to the brokerage to fill out the forms), fill out more forms for the actual investment, and send in or deliver checks in person to transfer funds.
It wasn’t until I was nearly 30 years old that I discovered online trading, and became comfortable transferring money electronically. And it wasn’t until just over five years ago that I purchased my very first individual stock online!
These days, online trading couldn’t be easier – in fact, in the last year, I’ve set up investment accounts for both of my kids and I regularly invest on their behalf, all online! To get started, all you have to do is sign up with an online brokerage and connect your bank account. Many traditional brokerages also offer online services, so you may be able to trade online with a company you already have an account with. If not, there are many online trading services, like E*trade Online Trading – ask a trusted friend or adviser for a recommendation if you’re not sure where to start.
One thing to remember: Before you invest in stocks and bonds, you should have an overall financial plan so you know what place your investments have in the big scheme of things. If you’re not sure, consult an expert – your CPA may be able to advise you, or recommend someone to talk to, or if you work for a large company, the human resources department can tell you if there’s an employee assistance program to help you.