Despite experiencing some anxiety-inducing volatility at the end of last year, the stock market has continued to record new all-time highs in 2019.
The major stock market indices, the Dow Jones Industrial Average, the S&P 500 and the Nasdaq, are already up between 16% and 22% so far, and we’re only a little more than halfway through the year.
Yet, many of us are missing out on the fun. Currently, only 54% of American adults have investments in stocks, either directly or through a company-sponsored retirement plan.
With regard to African Americans, the picture is even more grim. According to a recent Gallup poll, only 36% of African American adults have investments in stocks.
The good news, however, is that it’s never been easier or cheaper to start getting your feet wet in the stock market. Technology has truly leveled the playing field. With the advent of mobile investing apps and online trading platforms, there’s no excuse for not putting your money to work starting today!
Stocks have proven to be one of the best tools for creating and growing wealth so anyone who is serious about improving their financial situation should definitely include investments in the stock market as part of their overall financial plan.
TOM: ROB, THE OPPORTUNITY TO MAKE MONEY IN THE STOCK MARKET SOUNDS GREAT, BUT DON’T YOU ALREADY HAVE TO HAVE A BUNCH OF MONEY IN ORDER TO GET STARTED?
Well, Tom, it certainly used to be that way. Financial companies used to charge huge commissions and had significant account minimums which made it hard for the average person to get started with investing.
The great thing about the era that we live in now is that the internet has reduced both the costs and the barriers to entry for many things, including investing in the stock market.
There are a number of apps where you can start growing your dough with nothing more than the spare change in your pocket!
For example, with the mobile app Acorns, you link your bank account and the app will invest the leftover change from your everyday purchases into your choice of a few pre-arranged portfolios.
The apps Stash and Stockpile will even help you start investing in stocks with as little as $5! Now you might wonder how you can start investing in stocks with only $5 when one share of companies like Apple or Amazon are trading for hundreds or thousands of dollars per share.
Well, these apps allow you to buy fractional shares of the stocks that you’re interested in. So even though shares of Amazon are nearly $2,000 per share, you can invest as little as $5 in Amazon using these apps and you get the corresponding fraction of a share.
These apps are truly game-changers when it comes to getting started with little money.
Now, you won’t really become the next Warren Buffett by using these apps, but they are definitely great places to go if you’re starting your investing journey from scratch.
TOM: OK, SO WHAT IF YOU DO HAVE A LITTLE MORE MONEY TO START WITH, ARE THERE DIFFERENT APPS WE SHOULD LOOK AT?
Absolutely! For folks with a little more capital to start with and can buy whole shares of stocks instead of just fractional shares, one of my favorite apps is Robinhood. This app allows you to trade stocks for free! That’s right, they don’t charge any account or trading fees, and they don’t have any account minimums.
In fact, the zero commission idea seems to be catching on. Webull and Sofi also have stock trading apps that allow you to trade for free.
For beginner or intermediate level investors who want to take a more active role in choosing their investments, these apps are great.
One caveat here is that these apps lack a number of features and account types that truly serious investors will be interested in. Those who are on the more sophisticated end of the spectrum may want to look a little further.
TOM: ROB, TO THAT POINT, IF WE HAVE A GOOD BIT OF MONEY TO START WITH AND WE WANT TO BE SERIOUS AND ACTIVE WITH OUR INVESTMENTS, WHAT SHOULD WE USE IN THAT CASE?
For folks who are serious about their investments or have account types, like IRA rollovers, that the other apps can’t handle, I suggest opening an account at a brokerage firm like Fidelity, Charles Schwab, eTrade, TD Ameritrade, etc.
They are all big reputable financial firms and due to the stiff competition in the industry, most of them have removed account minimums and have lowered trading fees to about $4.99 per trade.
They also have full-featured mobile trading apps, provide access to market research and telephone support, allow you to place complex trades that will help you protect your funds (like stop-loss orders) and open up the ability to invest in other assets like bonds and options.
For the serious investor, the online brokerage firms are, in my opinion, definitely the way to go.
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Look, I understand that no matter where you’re starting in your investing journey, the process can be scary if you haven’t been educated on the topic.
If you’re truly serious about learning how to make your money work harder, I’ve created a free Intro to Investing training video to help you begin the process of becoming a confident investor.
YOU CAN FIND ROB’S NEW BOOK AT HTTP://WWW.SECURETHEBAG.ME
Financial advisor Rob Wilson is the Chief Insight Officer at his independent based financial advisory firm, Wilson Insight. He’s the author of the new financial advice book Secure The Bag: Create The Life You Desire By Managing Your Money Like You Mean It — as well as a frequent contributor to CNN, CBS, and NBC.
