The best time to plant a tree was 20 years ago. The second best time to do so is today. Investing your extra cash in the stock market for free while earning free stock with Webull is an excellent way to watch your money grow over a period of time. However, to maximize your returns, you need to invest you must money wisely by avoiding brokers that lack transparency and pass on a myriad of fees to their clients. To gain better control your financial future, you will need to set aside money on a regular basis to build your retirement nest egg or acquire capital for future business opportunities.
Stock or asset investing today is a lot more accessible, and some platforms like WeBull offers real-time market data, analysis tools, options, and zero commission trading for free from your browser, smartphone, or their desktop application. In addition, you get access to their paper trading platform which is a great tool for back-testing and practicing trading strategies without risking your capital.
So how you can you invest your money wisely after opening your Webull account? Here are a few pointers to get you started
Determine Your Trading Style
You will first need to evaluate how you want to invest in the stock market before making your first stock purchase. If you fail to plan, you plan to fail. Your availability, time management skills, and personality will be determining factors on what kind of trading or investment strategy will work best for you. A swing trader may hold stock positions for a day to a couple months. Day trader holding periods can go from seconds to hours, but usually close positions at the end of the day. Then there are your long term investors who may have positions open for months to even decades. Some traders prefer to go about investing alone, while others join trading discord servers, and other trading communities to exchange ideas. Whatever the case, it is best to take advantage of a free stock trading platform like Webull to ensure that you mitigate risk as much as possible when you begin your trading journey.
Create a Budget
This is another important factor you should consider when investing. Think about how much you’re willing to allocate to investing in a company or trading strategy. Dollar cost averaging is a great way to acquire shares over time as it is nearly impossible to perfectly time the market 100% of the time and get the best entry on your share purchases. Webull also offer members the opportunity to purchase fractional shares in the companies you love so now you can purchase fractions of small pieces of high priced stocks to further aid in diversification for smaller accounts. As a beginner, it is advisable that you should not invest more than 10% of your portfolio in any one stock. Set a limit on your investment against your total net worth and it should not exceed 20%. Check out this article on how to conduct a mid-year budget review and possibly free up some capital to fund your Webull account and trade for free.
Conduct Effective Research
There are over 10,000 stocks available for trade in US markets at any given time. Conducting effective research should be a key element in your trading plan. Keep up to date on overall market news, and pay attention to specific headlines which may affect companies you’re interested in. Research can be overwhelming due to the amount of information and strategies out there today. Verify the reputation of any new source or stock market “guru” you decide to follow, and be very skeptical of marketers offering trading strategies and returns that are too good to be true. If you do decide to go with a trading mentor, ensure to verify their trades, and backtest any strategy they offer using a Webull paper trading account before using a live account to trade real funds.
Diversify Your Investments
Once you have created an account through an online broker like Webull, stock diversification is one method used to mitigate risk. Buy stocks from different companies in different industries. While it might sound like a wonderful idea, your portfolio should not be comprised solely of tech, or trendy stocks sectors such as AI. Consider slow and steady moving industries such as utilities, or ETFs and Mutual Funds comprised of a basket of stocks.
Being awarded dividends is another great way to earn income on the shares you own in a company. Webull provides a neat divided search tool that can be used to filter out dividend paying stocks. Some investors use advance dividends tools from Dividends Stocks Online to find the best dividend income earning opportunities. They provide robust dividend scanners which allow you to search of stocks by dividend yield, ex-dividend dates, industry, and numerous other filters tied to the asset’s overall performance. One of the major benefits of dividend investing is the ability gain extra income while the stock is flat or in a downturn.
Separate your emotions
Participate in the market and don’t let emotions do your trading. You can never beat the stock market 100% of the time. Nor can you specifically predict when stock prices will rise or fall. Today market behavior is simply not good companies go up and bad companies go down; speculation is a factor to be considered. Fun fact: Most mutual funds don’t beat the market over time. Never let your emotions overcome your investment strategy if its proven to be profitable over time. Step away from the screen if you have to. However, learn to cut your losses and sell a stock if it goes below your risk tolerance levels.