At Highline Stocks our main goal has always been to help investors stay informed and invest smart. However we also understand how hard it is for people to learn and build a foundation for investing. That is the reason we created this guide, so that anyone could learn about the multiples aspects of investing.
The AIO investors guide provides a solid understanding to the many topics you need to know to invest well. Whether you are an experienced investor or haven't even started yet this guide has something for you.
CHAPTERS 4-16 COMING SOON
Investing is when you purchase an asset in the hopes that it will increase in value. Investing can be a great way to increase your wealth and set up passive income streams.
Risk is how much you stand to lose off of an investment. Return on investment or its acronym ROI is the monetary gain or loss from an investment.
Portfolio diversity is how well spread out your investments are across the same or different markets. Diversification is important because investment markets are unpredictable and you never know if an asset you have money in could lose value. By spreading out your investments you reduce the risk of losing most of your portfolio value in one fell swoop.
Setting financial goals is important because different types of investments will have different timelines for profit. For example, if you want to build long-term wealth, you should invest in assets with a solid future and consistent yearly gains. If you just want to build a passive income stream you should invest in a large company that offers dividends as they grow.
The stock market is an equity market made of shares of publicly traded companies and ETFs. There are many ways to invest in the stock market. One of the most common ways is using an app such as Robinhood or TastyTrade.
Bonds, also known as debt securities, are a way for investors to give money to a company or government with a promise of a return on the initial bond cost and predefined interest payments. The bond is paid back once it has matured. To purchase a bond you may have to go to a bond broker, mutual fund or the government. Bonds can be a good option for a low-risk investment.
A commodity is a physical good that is used in manufacturing in an industry. Although there are a lot of different commodities the most common are usually things like oil or precious metals like gold and silver. There are many ways to own a commodity. You can physically own the item or you could purchase shares in a ETF or mutual fund. The mutual fund or the ETF could be equal to the value of the item and as its value grows your shares do too.
Forex is the international market that allows you to buy and sell different currencies. Since different currencies have different inflation and stability rates, some become more or less valuable than others. Forex will enable you to trade various currencies against each other in hopes of profit. Although it can be a great way to garner wealth it is also very difficult and can easily lead to large losses. Forex trading is mostly for hedge funds and experienced investors.
Cryptocurrency is are digital assets without a physical form. They are often decentralized meaning that they are not controlled by a government or a single authority. In the scenarios in which they are managed it is often buy a brokerage company that provide trade security. Due to the nature of crypto they are very hard to counterfeit. The most unique thing about cryptocurrencies is that is value of them is determined by how much people are willing to pay for them. This makes them subject to high volatility. Due to there limited amount some people believe that in times of inflation they are a worthwhile investment
Value investing entails purchasing an asset that you believe is undervalued and will grow in value overtime.
Growth investing is investing in a company which in out growing the industry they are apart of. These companies usually introduce a new technology and characterized by rapid profit growth.
Income Investing consists of building a consistent long term income stream. The income stream comes passively from investing. Example of this include the rental payments from real estate or dividends from stocks. This strategy can be very useful for things like post retirement pay.
Index investing is a low risk investment strategy that involves investing in index funds (which are quite similar to ETFs). This strategy is useful if you don't want to spend time researching individual companies.
DCA is when you have a consistent schedule and a set amount for investing. Investing like this can help reduce your price per stock since you will be buying more stocks when its low and less when it is high.
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