How I started investing in stock market as a beginner


                                                 


I started investing in stock market several years back as a way to grow my portfolio. Prior to that, most of my personal savings were in traditional Savings account with Banks earning dismal 0.01% interest annually. Back then I did not think of much but after starting following some blogs on personal finance, I realized even only inflation (say 2%) would eat up my portfolio over time.

After some research, I came up to a conclusion that there are two options to grow portfolio 1)  Investing in stocks 2) Buying rental properties. However I am not a big fan of being a landlord, so ditched the later option. Stocks investing seems better suit as once someone invest correctly, the growth seems kind of in auto pilot mode. And US stock market historically returns around 10% annually if some one holds on tight during market turbulence like 2008 crash. That seemed quite appealing to me considering average net return of 8% (subtracting 2% for inflation).

Once I made up my mind for stock investing, selecting the right stock was bit daunting at first. I devoted some more time to research and discovered for a newbie like me, ETF (Exchange Traded Funds) might be better fit. So decided to go with ETF in first few months and later started adding individual stocks to my portfolio. To me, ETF are safer choice as they hold many stocks, hence even if some stocks go down, overall they do better in market volatility.

Usually ETF s are issued by Investment organizations like Vanguard, Fidelity, Invesco, Charles schwab etc. I love the fact that I can buy or sell my ETF anytime just like an individual stock.

Generally, ETFs follow two different strategies

1. Follow an index like S & P 500 which holds the stocks from 500 largest US companies
2. Follows a factor like High dividend paying stocks

I started buying following two ETFs and holding them as long term investment. Another convenience of ETFs are that regardless of brokerage account, they are mostly commission free to buy and sell.





Here are the two links usually I follow  but also buy from Invesco, Ishare as well.


https://www.fidelity.com/etfs/overview

https://investor.vanguard.com/etf/list#/etf/asset-class/month-end-returns


I will discuss details about some of my favorite ETF in next posts. Keep an eye all !!

Disclaimer: This article shows my personal opinion. This is no way professional financial advice. You may seek professional advice or conduct own research before investment.




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