The stock market in 2019 didn’t start out as well as it could have. After losing all of its gains for 2018 in a single month and with rumors of a contraction swirling, now may not seem like the best time to invest. Yet, fortune favors the bold, and if you’re determined to buy some stocks, now may be the time.
The amount of negative coverage about the market may intimidate new investors. You’re probably asking yourself, “how much stock should I buy?” The answer to that question has a lot of unique factors that only you can answer.
You should take into account how much money you have, and how much of it you can lose. You should also be well-versed in differences between safer blue-chip stocks and riskier bets. Finally, you should know where the best places are to get investing advice.
Keep reading below for help knowing how much stock you should buy in 2019.
Look At How Much Money You Have On Hand
Before you ever invest, you should always look at how much money you have on hand. This is known as your capital, and the point of any kind of investing is to make it grow. However, whenever you try to grow your capital, you also risk losing it.
You may not be able to spend the money that you invest. So make sure you have decent savings built up before you start trading. You should have an emergency fund equivalent to a few months of income, in case you lose your job or have unexpected expenses.
Ask Yourself, “How Much Stock Should I Buy?”
After taking an inventory of how much you have in your bank account, then you can start asking yourself about stocks. You should have an idea of which industries you want to invest in, and how much you want to diversify your portfolio. For most people, the answer to this is to just invest in fields they know the most about.
For example, if you’re interested in space exploration, you may consider investing in SpaceX stock. However, you don’t need to know a lot about any specific industry to invest well. You can also invest in an ETF, which compiles many different stocks into one, to make it easier for you.
Watch The Market Before Buying
The most important thing to do before investing is to watch the market beforehand. You should have a sense for how it fluctuates, and how different things affect it. You don’t need to be an investing mastermind before throwing your first dollar in, but you should have a sense for what you’re doing.
You can watch the market through a variety of easy-to-use apps like Robinhood or Acorns.
That way, you want panic-sell stocks begin tumbling. You’ll also have an edge against other new investors, since you may also notice opportunities they may miss.
There Is No Predicting The Market — Always Be Prepared To Lose
The most important thing to understand about the stock market is that you should always expect to lose money. Never put anything in that you don’t want to lose. Also, never take out debt to purchase stocks, since you can never be certain you’ll be able to pay it back.
It’s easy to answer the question, “how much stock should I buy?” The answer is you should only purchase the amount you feel comfortable with. Don’t spend money that you don’t have, and you will emerge from the stock market as a bonafide investor.
And information is the most important thing for all legitimate investors. It’s what they use to make their decisions. And for more information about stocks, and finding financial success, use our toolkit here!
Rachel Slifka is a freelance writer and human resources professional. She is passionate about helping fellow millennials find success with their finances and careers. Read more by checking out her website at RachelSlifka.com.