Stock Investing 101: Understanding the Basics

When I first started earning a decent salary out of college and had money to spare, I knew that I should get serious about my retirement and financial future. I remember going into my Fidelity retirement account to set up a retirement plan and take advantage of my employer’s company match and going, “What the actual heck does any of this mean? We didn’t learn about purchasing stocks in college! What do I even buy? I have no idea where to even start!” If that is you-I hope to provide clarity.

First, let’s start with what NOT to do:

1. Do NOT buy a bunch of individual stocks. You are an investor, not a speculator. If you want to set up a separate account or “unicorn fund” to buy individual stocks with your “Vegas Money” or “Play Money” that you can afford to lose, that is up to you- however, this is not a retirement planning or investing strategy.

2. Do NOT try to time the market. You will never find “the bottom”.

3. Avoid the temptation to day trade. It is VERY hard to outperform the market over an extended period of time. You may have short-term luck, but your chances of succeeding long term are highly unlikely.

4. Do NOT waste money investing in expensive hedge funds. Warren Buffet made a bet (The Million Dollar Bet) against top Hedge Funds on Wall Street, with…