OK, you’re ready. You’ve finally decided to start investing. But you can’t just go into it randomly. Beginners, especially, have to be prepared and understand the risks of playing the stock market.
Don’t Expect Millions Overnight
“My biggest piece of advice for Black investors is to understand that generational wealth isn’t something that the stock market can provide overnight,” financial adviser Kevin L. Matthews II tells Finurah.
Matthews, who has financial planning certificate from Northwestern University and has been a financial adviser with Capital One and Citi, empowers investors with his Building Bread investment education classes.
Investing takes commitment, advises Matthews.
“It is a long-term process that involves patience. Also, investing is not gambling and should never be treated as such. When you become an investor, you are a partial owner of that company. We also know that since 2000 the stock market has been positive 80 percent of the time, which is much higher than any casino or lottery would ever allow,” he explains.
Let’s Get Started
You’ll first need a brokerage account to buy stocks, which is fast and easy to set up. A brokerage account is used to buy and sell securities like stocks, bonds, and mutual funds. A brokerage account operates pretty much like a bank account, but you have access to the stock market and other investments with brokerage accounts.
You can set up an online brokerage account with an online broker. Or a managed brokerage account comes with investment management, either from a human investment adviser or a robo-adviser.
Question: A Financial Adviser or Pick Stock on Your Own?
“Having a financial adviser to choose for you is not required, but I think first-time investors should actually look for index funds and other exchange-traded funds (ETFs) first before looking at individual stocks. This can help you get acquainted with the stock market without taking on the risk of putting all of your eggs in one basket,” offers Matthews.
To learn more about how to invest, click here.