So, with all the unpredictability that has surrounded us for the past few weeks, you've decided to branch out and see if you can't expand your assets in order to protect your future financials.
While the economy has been hit hard by COVID-19, now could actually be an excellent time to think about buying stocks for the first time. A lot of stocks are historically low, which means that people who previously couldn’t afford them, now can. Let’s take a look at what you need to know before buying stocks for the first time.
1. Know Your Filings
Of course, it's good to go with what you know at first, especially if you have next to no experience in stocks. There are some investors out there that think they can predict which companies are worth buying stocks in and which aren't, but the truth is, nobody knows.
However, there are higher risk stock buys and low-risk options. We recommend starting out by looking at the filings of public companies so that you can learn as much about them as possible. The more you know about a company, the more informative a decision you can make.
2. Have Your Funds Ready
While you might have a vague idea about how much you want to invest in buying stocks, the reality is that prices change all the time, and you have to be prepared to pay more. You might have even decided on a budget and are determined to stick to it, but just like fluctuating stocks, it’s better to be flexible.
One thing is for sure – you’ve got to have a bit of money to start with. You can’t make money without spending a bit at the beginning, so get your finances straightened up before you buy stocks. Consider a short-term loan to boost your budget, and look up ‘auto title loans near me’ online to increase your funds.
3. You’ve Still Got to Pay Taxes
It might be tempting to think that buying stocks can be equated to getting a tax break because what you make from them goes straight into your pocket. Unfortunately, this couldn't be further from the truth – just like any other form of income, you'll need to pay tax on that dividend.
Not only will you have to pay taxes on any money you earn buying and selling stocks, but they can even end up taking quite a big chunk out. This is why you need to work out how to pay the lowest price for stock and sell it for the highest. That way, you won't have to give up too much of it to the taxpayer.
4. Don’t Take Stock News at Face Value
You might already realize that when it comes to stocks, their values and what people are buying and selling them for doesn't just change from day to day – they can change within a day, multiple times. This is why it's important to take any news you see about stocks with a grain of salt and continuously do your own research to get to the truth.
If you're thinking of expanding your portfolio of assets, and think that stocks are a good way to go, make sure that you're equipped with the right information. This is what you need to know before diving into the stock market so that you can play the long game.