Investing can be cumbersome when starting. How do you even start? What is the best strategy? With many types of products out there, it is important to define your strategy and risk appetite before you head off. To do so, you must understand the foundation. If you want to start, it is good to know the most common stock options: individual company stock and Exchange Traded Funds (ETFs). This article will look at the different investment strategies and see how one of the best stock tracker app options can support you.
Introducing stocks and ETFs
As you might know, you can purchase stocks of individual companies. For example, you can purchase a stock of Starbucks Coffee. In return, you become a company shareholder and are entitled to dividends. These dividends are paid out from the profit made by the organization and vary across industries and companies. For example, emerging players often do not pay dividends as they use their profits to invest to become larger. It is important to understand this, as it will help you create a good investment strategy.
On the other hand, we have ETFs. These are often based on indexes and invest in a broad range of companies at once. You can look at it as purchasing a single ticket for multiple attractions. However, the attractions change over time based on the market demand and the indexes. This makes it possible to pursue a more passive investment strategy, as the ETF adjusts over periods. Good examples of popular funds are the S&P 500 and Vanguard World.
Determine how you want to invest
To start with your investment strategy, you first need to determine your time horizon and risk appetite. It helps to have a more passive (i.e., ETFs) investment strategy when you are risk-averse. This limits the potential of making emotional instead of rational decisions and ensures you keep on track. Do note that passive investing is typically helpful when dealing with long-time horizons. Some strategies combine the two. For example, a common strategy is the core satellite. You focus on broad ETFs within the core that require little attention and grow over time. On the other hand, the satellites can be hand-picked stocks and funds that are riskier but also come at a higher reward. This can be of interest to investors who want to invest passively but also want to have some “play” money on the side.
Want to learn more about stock tracking your portfolio?
Want to learn more about investing using a stock tracker app? Make sure to check out one of the leading providers: Delta.app. This tracker combines all types of asset classes ranging from stocks to crypto into a single overview. They also allow you to integrate directly with brokers using API and wallets through the Public Key, creating a safe and secure investment overview.
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