​Insider Tips on How to Start Trading in College

Lucy Wyndham  |

According to Bankrate.com, only one in three millennials have money in the stock market. This is because many millennials believe that they don’t have the money to lose, or simply think that trading is an activity just for rich people. However, this isn’t true. You should start investing in stocks as soon as possible. In fact, starting to trade during college can help you with your student loans, once you’re out of college. So, if you are ready to start saving for your future, check out these insider tips on how to start trading in college.

1. Do Your Research

People say that you can learn how to do anything online, and investing is no different. Start with online articles and books to help you gain the knowledge and background you need to be a savvy investor. You can start with financial sites such as Forbes or Business Insider, and work your way up to books. You should also research top-rated stocks and study their performance over time. This can help you determine what type of stocks you’d like to invest in, and learn more about trends and how they can perform.

2. Pay off High Interest Debts

If you want to be in a good financial place, you should evaluate and analyze your outstanding loans and debts. You will want to start to pay off credit cards with high interest rates, or look into companies for student loan refinancing to ensure that you are not risking too much in the market. From this analysis, you should figure out how much money you can spare and what you can realistically invest in the financial markets. As a general rule, you should only invest money that you have, and never borrow money to invest.

3. Select a Brokerage Firm

You will want to start a brokerage account as soon as you make the decision to invest. There are two options that you can choose from – either an online discount broker, where you trade through a computerized system, or traditional brokers, which give you more personal advice and services. Many students though opt for online discount brokers, because traditional ones tend to require large money up front and charge higher service fees.

4. Diversify Your Portfolio

You shouldn’t put all your eggs in one basket. Instead, make small, fixed investments in multiple stocks on a regular basis. Diversifying your assets will reduce risk and increase your potential return on investments. Also, when you make small, regular payments, you can determine just how much you can afford month-to-month.

As a young investor, you have one thing working in your favor: time. The earlier that you invest, the better your return could be in the long run. Since time is money, you will earn more through compounded interest and set yourself up for a bright, financial future. All it takes is one less frat party, and one more hour at the library to get your future in order.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer



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