Prior to the advent of online stock trading, investors were largely beholden to brick-and-mortar stock brokerages when they wanted to invest their money in the stock market.

Things have changed.

Today, investors are able to manage their investment portfolio from their fingertips, using mobile apps to instantaneously buy and sell stocks from anywhere with a Wi-Fi signal.

The volatility of the market, however, remains constant. Investing is still a risk. But that risk can be mitigated with a little knowledge of how the market works, and how to make it work for you.

All businesses, and especially the stock market, operate by supply and demand. The demand for the products or services of a particular business will typically result in seeing the value of its shares rise, as investors seek to own part of an increasingly valued company. However, stock prices fluctuate for a myriad of reasons, many of which are beyond the scope of this article.

How does one choose a stock to invest in?

There are two main philosophies that try to answer that question. The first is fundamental analysis, which examines all aspects of a company to evaluate its profitability. That includes looking at financial reports and statements, company news releases, industry and historical trends, as well as speaking with CEOs, employees, and customers. Looking at the company from all angles allows investors to see what exactly drives a company, and to make predictions based on a grasp of how their momentum works.

Second, technical analysis evaluates patterns in stock prices with the underlying assumption that the price of a stock at any given moment provides almost all of the valuable information one can draw.

Most traders employ a combination of both techniques.

Researching an online brokerage with which to do business can be just as involved as researching stocks. Things to consider: their fee structure, online reviews from past and present customers, the caliber of customer support services, and their overall track record.

Novice investors may want to invest in a company that provides more hands-on support (although these typically come at a higher rate). Investors with a bit more experience may go for discount brokers who don’t offer intensive support services but have less trading fees.  

The information gap may also be offset by the plethora of free learning resources available online, from podcasts to instructional YouTube videos to digital financial news magazines. Also, check to see if there’s an investment club where you live so that you have an opportunity to discuss with others the ins and outs of online market trading.

Also, online stock simulators like Wall Street Survivor and Investopedia offer risk-free ways of getting a firsthand feel for trading.

When you start investing with real money, it’s critical to know your risk tolerance. Investing within your means will help build your investment portfolio disaster-free.

Diversifying is a safe way to protect your money. By spreading your assets across several businesses and multiple sectors of industry, you offset the chance of losing your investment in one sector-specific, or company-specific, crash. The market is unpredictable, after all.

Patience is key, and panic may leave you broke. Although there’s always some degree of fear associated with your investments failing, or an overall market crash, safer stock choices usually begin to pay off over time. (Keyword: time.) Investing, especially in the beginning, shouldn’t be about sprinting — it’s about slow-and-steady endurance.

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