Q:

How do you become an investor?

A:

Quick Answer

To become an investor, choose the type of investments you want to make, choose the investment vehicle, open a brokerage account, and choose a healthy balance of stocks and bonds in which to invest. You need investment capital and a solid investment plan.

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Full Answer

  1. Decide on the investment type

    Choose the type of investor you want to be. For example, you can become a direct trader or a buy-and-hold investor.

  2. Choose your investment avenue

    Choose the investment vehicle with which you are most comfortable. Choose mutual funds if you want to obtain profit on a monthly basis. Choose exchange-traded funds if you want more direct involvement in your portfolio.

  3. Choose a broker

    Establish a brokerage account if you want to make bets on industry sectors or a particular company or if you want to trade ETFs. Choose deep discount brokers if you want to slowly build a diverse portfolio over time. Choose discount brokerages if you want more comprehensive features, and choose a premium broker if you need extra service and advice.

  4. Select the investment

    Pick the companies that interest you most. Start a low-cost portfolio that has ETFs or mutual funds with a good balance of bonds and stocks. Place around 20 to 30 percent of your investment in bonds and your remaining capital in stocks.

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