I have now maintained an investment account for about two years. I first opened an online trading account at the suggestion of my husband. He thought that opening an account would help me learn about researching companies so that I could contribute to our family’s investment portfolio. Initially, I started with only one company’s stock in my investment portfolio. However, over the years the number and mix of large versus small companies as well as domestic versus international holdings in my portfolio has grown significantly. More importantly, I no longer need much guidance when I research companies to identify good, solid fundamentals for investment.
The growth in my comfort with investing did not come easily. Nor did I gain much knowledge or understanding quickly. Instead, I spent a significant amount of time over the past couple of years reading about investment strategies and learning all that I could about the basics of stock investing. There are several good sources of information on the internet if you are interested in improving your investment knowledge. Several address the basics of how stocks trade and provide a basic history of stock trading. Other websites provide both information and the tools required to proceed with your investment strategy. If, like me, you decide to pursue online stock trading , there are a host of resources that you can use to get started.
Recently, I have begun reading about option trading and day trading. Although both of those tactics remain beyond my comfort level, I am intrigued about the possibility of someday utilizing both approaches. For now, however, I will continue to sharpen my basic research skills and my knowledge of how the market works. It is my hope that as my knowledge increases, I can continue to make a greater contribution to our family’s long term investment goals.
Although my initial holding was an individual company stock, lately I have been reading more about mutual funds. My husband believes that individual stocks are always better than mutual funds unless the fund is a market index. His position is that with research, you can identify companies with sound fundamentals, growth strategy and management, and you will stand to do a lot better than investing in mutual funds, which are often assembled with the primary goal of limiting risk. The problem is that generally as you limit your risk, you also tend to limit your potential rewards. Although I concede that it might be difficult to keep up with market changes or material changes to several individual businesses, given that I have a long investing future ahead of me, I still think it is best that I focus on individual stocks.