If you’re new to investing and not sure where to start, this email will point you in the right direction. If you’re more advanced, this email may cover information you’re already familiar with but stay tuned for follow on emails that dive deeper into Tykr.
Your first investment is always a little nerve-racking. You’re about to put money in the market and watch it go up or down. The following steps will ease your nerves and allow you to get started with confidence.
1. Select a Broker
Before you start investing, you’ll need to setup a broker if you haven’t already. Tykr is a stock screening platform not a broker platform. A broker platform is where you’ll connect your bank account and deposit your first $1000.
Click Here to see the list of brokers we recommend.
2. Cash Account vs Margin Account
When you sign up for your broker, it may ask you if you want a Cash Account or Margin Account. Select Cash Account which means you’ll only invest the cash you add to the broker. Margin Account means you may borrow money from the broker similar to borrowing money from a bank (in the form of a loan). The issue with margin is what’s called a Margin Call which occurs when the value of an investor’s margin account falls below the broker’s required amount. This can happen when stocks fall. When a margin call occurs, you must choose to either deposit more money in the account or sell some of the assets held in their account.
When you sign up for your broker, it may ask you the purpose. Some of the options may include growth, preservation of capital, income generation, hedging, active trading, and speculation. You can select any of these but the option that has the least follow on questions is Growth. Overall, you want use your broker to grow your wealth. The primary focus is not to generate income although you can certainly withdraw cash if needed. You will also not use this account to hedge, trade, or buy speculative stocks.
4. Finish Setting Up Your Broker
After you finish setting up your broker, you may use Tykr.
5. Login to Tykr
When you login to Tykr, you have two easy places to start. You may click on “Sean’s Portfolio” which you will see if you are a Pro user. These are the top 10 stocks I hold in my portfolio. You may also click on the Top 50 which are a list of stocks with the highest scores (20 being the best and 0 being the worst). The higher the score, the safer the investment. You may also filter multiple columns at once to find stocks from your country and categories of interest.
6. 3 and 5 Businesses
Find between 3 – 5 On Sale businesses to invest your first $1000. Tykr has completed the hard work for you. On Sale businesses are stocks with strong financials (A score equal or greater than 10) and a strong MOS (Margin of Safety equal or greater than 50%). We recommend individual stocks because your returns will be much greater over time. However, you may purchase ETFs (Exchange Traded Funds), Index Funds, and Mutual Funds which are essentially bundles of 100 stocks or more. Here is an article that explains the difference between Stocks, ETFs, Index Funds, and Mutual Funds.
7. 3 and 5 Sectors
Try to spread your stocks over 3 – 5 sectors. Some of the sectors include Financial, Consumer Goods, Technology, Industrial Goods, etc. You don’t want to “put all your eggs in one basket.” In other words, don’t buy all stocks in one sector. By spreading your stocks over a few sectors, you establish diversification. This way, if one sector goes down, your entire portfolio won’t go down.
8. Buy Stocks
Now go back to your broker and buy the stocks you found in Tykr.
9. Market Order vs Limit Order
When you buy a stock, your broker platform may have you choose between Market Order or Limit Order. Market Order means you’ll buy at the price shown. Limit Order means you will need to set a limit at which the stock will be purchased. For example, if the stock is trading at 25.50 and by default the Limit Order is set to 25.00, this means the stock will only be purchased when it drops down to 25.00. If the stock never drops down to 25.00 in the same day, the stock won’t be purchased. Overall, we recommend Market Order as it’s much easier.
Make sure you set your duration as Day. This means you’ll buy a Market Order today. If you set another duration, the stock will be purchased at a later date.
If you buy a stock and the stock goes down right away, just relax! You have to remember that investing requires patience. You’re going to invest and hold for weeks, months, and in some cases, years. Now sit back, relax, and let the power of compound interest go to work for you.
Get your most burning questions answered.
Benefits and Features:
- Save time
- Reduce fear
- Learn all investing steps from A-Z
- Learn when to buy
- Learn when to sell
- Learn how to reduce risk of losing money
- Learn how to stockpile (Maximize returns in the stock market!)
- And more…