How To Invest in The Stock Market

The complete guide to making money in the stock market

The Stock Market

Investing in the stock market can be an extremely lucrative source of income, but you can also lose a lot of money as well. We got your back, we’ll show you the ins and outs of investing and how make money not lose it.

Basics

When you invest in a stock, you are buying a share of a company. When that stock price goes up in value, so does your share.

Ex: If you buy $1,000 worth of apple and the stock goes up 5%, you made $50

Choosing the right brokerage

There are many brokerage options out there, however we recommend Webull as it has more than enough capabilities and features for the average investor. Its also comes with no hidden fees like a lot of other brokerages tend to hide. Webull was also rated one of the top brokerages of 2023 according to Bankrate.com

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The S&P 500

The S&P 500 is an example of an ETF. When investing in an ETF you're essentially buying 500 stocks at once all grouped into one stock. This is generally seen as the safest option as your portfolio is well diversified. Over the past 10 years the S&P 500 has provided an average return of 12.15%

Dividends

Dividend stocks pays the investor back a certain percentage of money called the dividend yield for simply investing in their stock.

Dollar Cost Average

This is a strategy many investors use to simplify their strategy and not pay attention to economic conditions affecting stocks. It implies you invest the same amount everyday/week/month no matter what. They invest the same amount over time no matter if the stock is performing good or bad on that day.

Options (advanced)

For advanced investors, options allow you to invest in a contract that gives you the option, but not the obligation, to buy or sell shares of a certain stock at an agreed-upon price and date. One options contract generally represents 100 shares of the underlying stock. This is a way that advanced investors can make money fast with little money as they are trading 100x worth of shares by only buying the contract.

Crypto

Crypto is still somewhat new and no one can tell you if its going to be the next currency or if its going to zero. Plus taxes are much higher when compared to traditional stocks. However if you’d like to diversify a small amount into crypto because you believe in its technology and future, diversifying a small wouldn’t be a bad idea.

Risk management

It’s important to talk about risk management to not lose money. In the stock market when putting an order in you can add what’s called a stop loss. This is when if the stock hits a certain price it will kick you out so you don’t lose any further money. Its important to know when to take profits and exit a trade, as things can go side ways fast.

Taxes

Depending on how you're investing you’ll pay a different amount in taxes. If you hold a stock for over 2 years and then decide to sell, it will be classified as a long term capital gain and you’ll be taxed on that gain from 0%, 15%, or 20% depending on your income level. Short term gains( 1 year or less) will be taxed from 10-37%.

On the other hand if you lose money, you can use that a write off and deduct your losses against your capital gains or income.

Watch this video for a more in depth explanation