Which brokerage offers the best educational videos? TD Ameritrade, hands down. TD Ameritrade's educational video library is made entirely in-house and provides hundreds of videos covering every investment topic imaginable, from stocks to ETFs, mutual funds, options, bonds, and even retirement. Progress tracking is also part of the learning experience.
Now that you have a grip on investment basics and have decided to invest, how do you build the right portfolio? Let’s consider an all equity investment portfolio where you put 100% of your portfolio in stocks. Is this a good idea? Not exactly. Why? Because diversification allows you to avoid large losses and build long-term wealth. Consider starting with a portfolio that is 80% stocks (equities) and 20% bonds. One of the easiest ways to start your portfolio is to buy 80% of your portfolio in the Total Stock Market Index ETF (VTI) and 20% Total Bond Market Index (BND). Both ETFs are from Vanguard and offer low expense fees and ease of purchasing through any brokerage account.
Traditionally, Americans have tended to stay close to home when it comes to their equity portfolios, but this is now changing as more investors realize the diversification and growth benefits of investing in the global economy. Indeed, U.S. companies constitute only about half the value of all world equities, and that piece of the pie is slowing getting smaller. Virtually every portfolio should have a good slug of international stocks.
Full-service brokers are what most people visualize when they think about investing—well-dressed, friendly business people sitting in an office chatting with clients. These are the traditional stockbrokers who will take the time to get to know you personally and financially. They will look at factors such as marital status, lifestyle, personality, risk tolerance, age (time horizon), income, assets, debts, and more. By getting to know as much about you as they can, these full-service brokers can then help you develop a long-term financial plan.
Some retirement plans and accounts also have asset protection benefits. For instance, some have unlimited bankruptcy protection, meaning that if you suffer a medical disaster or some other event that wipes out your personal balance sheet and forces you to declare bankruptcy, your retirement savings will be out of the reach of creditors. Others have limitations on the asset protection afforded to them, but still reach into the seven-figures.
In general, you want to start investing as soon as you have a solid financial base in place. This includes having no high-interest debt, an emergency fund in place, and a goal for your investments in mind. Doing so allows you to leave your money invested for the long-term – key for maximum growth – and be confident in your investment choices through the natural ups and downs of the market.
Online brokers make it painless to enter an order and place a trade to buy stocks. Once you have a brokerage account, you’ll just need to know the stock’s ticker symbol to place the trade. A ticker symbol is one to five letters in length, and identifies the specific stock you want to trade. For example, Amazon’s ticker is AMZN. Nike’s is NKE. Ford’s is F. And so on.