New Investors: Two Critical How-To Videos
Note: The article below comes from our Editorial Director Matthew Benjamin. He addresses the first step every new investor must take in order to overcome their fear of investing.
I’m always shocked when I hear the news. It’s like buying groceries and never eating them. Or, worse, like getting a check and never cashing it.
I understand why it happens. But I certainly don’t want it to happen.
The truth is, of the Club’s more than 100,000 Members, a large portion have never invested. That means they’re not building wealth, they’re not on a path toward financial liberty, and they’re not using one of the simplest tools to achieve a better and happier life.
They come to us for great investing ideas… but never cash that check.
Like I said, we know why so many folks don’t invest.
It’s not that they don’t have the money. After all, it doesn’t take much. My son started investing with just a $50 bill when he was 5.
And it’s not because it’s too complicated. It takes 10 minutes to open a brokerage account and make your first trade. Plus, as an Oxford Club Member, you’ll never have a shortage of investment ideas.
No, the reason so many folks don’t invest is they’re scared. The thought of losing money is intimidating.
The truth is, we’re quite proud of how many Members do invest. As a percentage, it’s far, far greater than the national average. Only 48% of Americans have any money in stocks. The Club’s average, obviously, is dramatically higher.
But even just one Member too afraid to invest is too many.
Instead, we say folks should be afraid not to invest. They should be afraid that, as Steve McDonald puts it, “they’ll wake up broke in their 80s.”
Our aim with this column is to alleviate the fear. If we get just one Member to start investing – to cash that check – we’ll sleep well tonight.
The realm of psychology tells us that the best way to overcome a phobia is to simply engage the fear with some sort of safety net in place. For folks scared of flying, the trick may be to use a flight simulator. For folks scared of heights, it may be climbing to the top floor of a building and merely looking out the window.
For investors, it’s making a trade… without the risk of loss.
It’s paper trading.
If you want to get your investing feet wet but don’t want to risk your own money as you figure out what you’re doing, start by making simple “pretend” trades.
There are plenty of online services that let you do it.
Here is a link to our favorite paper trading service, offered for free by the CBOE… click here. (The Club has no affiliation with the site. We simply like its product.)
We urge you to sign up for an account and make the trades from the service(s) you subscribe to. Take a few weeks or even a couple of months to get comfortable. After just a few successful trades, most once-timid Members tell us they are ready to start investing their own money… they’re ready to cash that check.
Once you’re ready, if you don’t yet have one, it’s time to open a brokerage account and make your first trade.
Our team here in Baltimore recently put together a couple of videos that walk you through everything you need to know to make your first trade.
This short six-minute video shows you how to buy a stock using the CBOE site above…
And this one shows you how to buy an option…
It’s simple. No magic or Wall Street expertise needed.
Do not let fear hold you back. There are plenty of tools that will help you make your first trade… without risking a penny.
Take advantage of them.
It’s time to cash that check.