Buzz·Posted on May 6, 2021I Started Sticking My Extra Money In The Stock Market — Here's What I LearnedIt's time to talk about stonks.by Simrin SinghBuzzFeed StaffFacebookPinterestTwitterMailLink Disclaimer: I'm not a financial expert by any means. These are just my personal takeaways as a newish investor. Tap to play GIF Tap to play GIF 16horsesinabucket / Tumblr / Via gph.is Before making any major investments, it's important to consult an expert or do your own research first. All investments come with some risk, so it's usually a good idea to avoid investing money that you might need any time soon. Just so you know, BuzzFeed may collect a share of sales or other compensation from the links on this page. Let's face it, the stock market is intimidating. Tap to play GIF Tap to play GIF Paramount Pictures / Via gph.is For most of my life, I thought investing in stocks was for old, rich people. I only knew two things about it: Bernie Madoff got into trouble doing something on Wall Street, and people in suits at the NYSE run around on the phone, ringing bells or something. It was easier to just avoid the elusive topic altogether rather than to try to learn about Wall Street, the SEC, and dividends. It wasn't until I was introduced to a mobile do-it-yourself stock trading platform that I felt encouraged to investigate a bit. Tap to play GIF Tap to play GIF @watchallblk / Via gph.is Investing in stocks has never been easier or more accessible for amateurs than it is now. There are dozens of mobile apps, such as Robinhood, Stash, and Webull, all of which allow you to track stock prices and trends, as well as trade. I downloaded an app called SoFi, where I could pull in money from my bank account and use it to buy any stock I wanted. It's literally online shopping, except you don't get a fun package in the mail. I didn't have the guts or the money lying around to put in a risky investment that needed time to grow, so my first purchase was actually just a tenth of a full stock. Tap to play GIF Tap to play GIF @memecandy / Via gph.is While this method isn't usually the best way to score big, it gave me a chance to practice and better understand how to read the market without losing a bunch of money. In the beginning, I didn't have the patience or time to read dense articles and predictions about every stock's potentials, so I learned by doing. I bought a tenth of a stock in Alibaba, and by tracking its fluctuating price, I started to figure out what influences highs and lows in price. It also got me in the habit of checking on my stock daily. I found it helpful to subscribe to business newsletters. Tap to play GIF Tap to play GIF @cbc / Via gph.is Believe it or not, there's actually fun-to-consume content about the stock market. Some of my favorite conversational-style newsletters that I subscribe to are Morning Brew, Robinhood Snacks, and TLDR. These newsletters have become an important part of my morning routine as an investor because they tell me what's going on in the business world in simple language. With that info, I can make a better guess as to how different stocks will perform. Basically, they help me make educated decisions about my holdings and future purchases. Learning about newly IPO'd companies helped me find investments that have potential to grow. Tap to play GIF Tap to play GIF teendotcom/Tumblr / Via gph.is Once I was comfortable with keeping track of my Alibaba stock, I looked to find a higher risk investment that could actually make me gains. I read that a smart method was to get in on a newly public company that has a lot of potential, but has a cheap per stock cost right now. That way, if the company eventually gets really big, my investment could double, triple, or quadruple in value. This is tricky because no one really knows how a company will fare over time, but with the help of some articles by industry leaders and experts, you can get an idea of whether the company's value will increase or decrease. I looked into buying stocks of companies in various industries (even if I had never heard of them before). Tap to play GIF Tap to play GIF @wetv / Via gph.is This has been an important thing to remember for me because it's so tempting to buy stock in companies that are household names like Disney or Coca-Cola. Those stocks are generally stable, which means they probably wouldn't increase or decrease much in value for me, especially with the small amount of stock I'd purchase. Companies working in the real estate, sustainable energy, or artificial intelligence spaces, for example, could be worthwhile investments because of the role they may play in our world's future. Oftentimes, companies that I was unfamiliar with brought me larger returns on my investments. I decided to diversify my investments to give myself some protection against loss. Tap to play GIF Tap to play GIF @spongebob / Via media.giphy.com If I'm going to set aside some money to invest, I like to avoid buying all of the same stock unless I feel really confident that that company will grow a ton. By investing in a variety of stocks, I could protect myself from potential major loss. I wouldn't want to lose everything if one company's value shoots down to nothing. However, spreading out too much can also be fruitless because it might get me little to no significant return. So, while my investments are spread out in a few different industries, I have more stock in some companies than in others because I believe in their potential for growth. Finding a balance that works for me and my budget is super important. Tap to play GIF Tap to play GIF reactiongifs/Reddit / Via gph.is Because there is a lot of risk involved in investing, I try to have a number in mind for the maximum amount of money I want to put in on any day. This, of course, varies depending on the stock I'm purchasing, but I find that it's harder to get carried away "shopping" when I have a budget in mind. I also try to find balance in the types of stocks I buy by diversifying. There is no exact rule book or map that guides my decisions, so while I have these goals of balance in mind, they won't always apply to every decision I make. As I gained confidence as an investor, I learned to keep an eye on metrics besides a stock's price. Tap to play GIF Tap to play GIF Giphy / Via gph.is Stock price fluctuations are extremely important, but I like to look for other details and numbers that are readily available in SoFi before I decide whether or not to invest. First, I check how long the company has been around and how long it has been public. This gives me a better idea of how fast it may have grown and whether or not it's too soon or too late to invest in it. I wouldn't want to invest in a company that has already peaked and may never rise again. I also like to see if any big companies or entrepreneurs have invested in a particular company. Tap to play GIF Tap to play GIF @abcnetwork / Via gph.is If Mark Cuban or Tesla invested in a particular technology brand, I would feel more confident investing in it because it lends that brand a lot of credibility. Finally, I will try to check out the company's growth rate. Has it been profiting each year? Has it acquired other companies in the past? Asking these questions helps me determine if my potential investment will pay off. Even though I started investing with just a little spare cash, it's turned out to be really worthwhile for me. SoFi I started with $10 and as I got better at it and figured out what makes a good investment, I increased how much I put in. I've learned a lot along the way. For example, I realized I'm most comfortable picking investments that I can be in for the long run so I don't have to trade stocks daily. Most importantly, I've learned to not be freaked out by the stock market, because while I can't control which way the market goes, I ultimately can control the level of risk I put myself in with my investments. Sometimes, it's scary to see one of my stocks decline, but the market shifts all the time and I know all my decisions were well-informed. I just remember to have a lot of patience, stay calm, and ride out the market's waves. For more information on investing for beginners, click here to hear from an expert.