We have all heard the stories. Someone, somewhere, somehow makes a crazy amount of money overnight because they lucked out on some stock at the right time. So yes, stocks can make you money. Does this mean you need to jump in feet first and start investing to be in the chance to make it big? No.
Getting started with investing in 2021 couldn't be easier. Some might say you are spoilt for choice with free investment apps like Robinhood through to brokerage platforms of every size and shape, and with the ever-growing popularity of fractional shares, you can now invest with as little as $1.00. However, if you're still not sure, you could always use apps like sours and just get the stocks for free!
Whether you have "Investing for Dummies" up next in your reading list or looking to refresh your knowledge, you will want to read this.
Let's start at the beginning.
A stock or a share is a piece (stake) of a company. For example, if you own a share in a company like Apple or Tesla, you own a part of that company. There are several classifications of stock. The two main types are common and preferred stock.
Depending on the share you hold, you are entitled to specific benefits from dividends, voting rights, and more. Stocks can also be grouped into categories based on their performance, such as Growth stock, Yield stocks, New issues, Defensive stock.
Companies use stocks or shares to generate revenue or capital for their business activities. You can only buy shares from a company on the open market (that's the stock market) when a company is publically traded. A company goes from a private company to a public company through something called an IPO. The price of a share is dependent on market demand, which means more interest a company's stock has, the more expensive it is, and the less interest, the cheaper it is.
Why own stocks?
Owning stocks is the easiest way to support and be an owner of the brands you love. It's also a great way to grow your long term wealth. Stocks can increase in value but can, on the other hand, lose value. This means you can gain from these brands' success. So whether you are a Starbucks lover or spent most of 2020 watching Netflix, you have the chance to make the most out of it. Become a shareholder and make the first move from consuming to owning.
What does it mean when you own stocks?
There are several benefits to owning stocks. When you own stocks, you take on ownership of the companies you love and increase your wealth. While stocks serve their purpose to make you money, they also come with risks. It's also possible to lose money on Stocks (*pretends to be shocked*). But seriously, stock prices can fluctuate for lots of reasons. For example, when everyone's favourite sports brand Nike doesn't sell enough sneakers, their stock price would fall. Sounds like one risky business, right? Well… investing is never without risk. One day it can be all blue skies, and the next thing you know, you got less dough than Pizza Hut. However, there are other, more small-scale ways to get started… such as fractional shares.
Did you say fractional shares?
Yes, you heard it right. A fractional share is basically a piece of a full share. Fractional shares allow normal people like me and you to invest in companies we might not have been able to afford or not willing to take the risk on. For example, one share of Amazon is worth $3.327,57at at this moment in time. Now I'm not sure about you, but dropping more than $3000 on a single stock is slightly too risky for me as a first-time investor, so in this instance, I would turn to a fractional share option.
Fractional Shares and Bits of Stock
But hey, how can I get my hands on these fractional shares? How do I start investing in fractional shares? Or where do I even buy these fractional shares? Well, you're in luck, my friend. You have found yourself in the right place, a place they call Bits of Stock.
Why is this so good? Let us tell you. I assume you shop? Maybe for fun or perhaps not for fun, but you shop none the less. Well, the Bits of Stock rewards you in fractional shares in the brands you shop for free! Yes, for free every single time. Imagine that, before reading this article, you were unsure about how to start investing, and now on a large silver plate, you have been offered free shares to start investing… free Bits of Stock when you shop, what are you waiting for?
Interested to know more about how it works? Why not read our Get Started With Bits of Stock.