Investment Strategies For Beginners

Accountancy Resources

Investment Strategies For Beginners


I just inherited some money and want to make an investment in shares of stock. Do you have any advice for someone who has never invested in the stock market?

Basically, the first thing to do would be to open a brokerage account with a reputable stockbroker. Depending on how you want to go about your investment in shares, whether you want to do your own research, or have your broker give you recommendations, will determine what kind of brokerage account you would want to open.

A full-service brokerage account generally charges higher commissions but generally provides investors with the personal services of a registered stockbroker, licensed to give recommendations on stocks and that conducts investment research for clients.

Most full service stock brokerage accounts generally require a larger minimum deposit than a discount brokerage account.

A discount brokerage account, on the other hand, has lower initial deposit requirements and charges the customer considerably lower commissions, but does not provide clients with any research. Most discount stock brokerages offer their customers a trading platform and online in-house research which can be adequate for most investors.

One investment strategy when opening a full-service brokerage account – which is not generally available to customers of discount brokerages – is the opportunity to subscribe to Initial Public Offerings of previously private companies in the process of issuing stock to the public. Getting in on the ground floor by investing in shares of a promising company has made many millionaires out of regular investors.

A number of other strategies can be taken once the trading account has been opened. If it is with a discount broker, you can then research what type of stock you wish to purchase, many resources exist online. If you have opened an account with a full-service broker, ask about upcoming IPOs and how your broker can add you to a subscription list as well as what stocks are currently recommended by the brokerage.