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Investing in the stock market as a beginner


Historically, investing in stocks has been the best way to earn, increase savings, combat inflation and make sure your money is working for you. However, the sheer price of company stocks has historically presented a great barrier to entry for beginners, many of whom are forced to forgo the stocks of premium companies. Luckily, Olymp Trade provides fractional units of a stock for our users. Fractional units allow investors to buy a portion of a share instead of the share in its entirety, making it easier to build a portfolio of stocks using a small amount of money.

How to invest in the stock market

Without getting too deep into fundamental analysis, a good investment in a company’s stocks involves choosing a company that provides a needed service. If you find yourself using Facebook or Instagram every day or use their services to market your business, you are not alone. Today, 3.51 billion people actively use   Meta’s products on a monthly basis. Certain businesses depend entirely on advertising through social media. This is why we consider Meta (the parent company of Facebook and Instagram) a good investment option.

Investing in the stock market as a beginner

The current share price of Meta is about $130. This is relatively expensive, considering you need to buy more than one share in order to make sufficient money. This is where fractional units come into play. In order to invest in Facebook with Olymp Trade, one fractional unit would only cost $1.30. This is an excellent alternative to buying entire shares that allows beginners to get into the market. Experienced traders and wealthy investors can also make use of this feature for portfolio expansion and improved asset management.

Step-by-step guide: How to start trading shares as fractional units

Olymp Trade is intuitive and easy to use even if it’s your first time on such a platform. When on Olymp Trade, you can access fractional units from Stocks mode.

Even for beginners, buying stocks is fairly straightforward, but here’s a short guide:

Dollar-cost averaging

A simple strategy that we can recommend is setting aside a certain amount of money each month and investing it into stocks. This is one of the most effective ways to invest, and is called dollar-cost averaging. It is often how retirees in the United States invest their retirement money. Without fractional shares, you would have to save up the full amount to purchase one share, and until you can afford to do that, your capital would be sitting in your account, not doing anything.

Some of the best stocks to invest in right now are also some of the most expensive, and building a diversified portfolio could cost upwards of $10,000. Using a dollar-cost averaging strategy with fractional units allows you to invest even the smallest monthly amount that you’re able to set aside. Remember that the key principle of investing is that it’s a long-term commitment that is proven to work when you stick to your plan.

Getting started

As you can see, the process of buying and selling fractional units is easy. It’s particularly valuable for investors who are working with limited capital but also an important tool for savvy investors wanting to diversify or hedge their positions. Fractional units of shares allow you to build a portfolio that may otherwise be unaffordable. That being said, make sure you maintain a healthy risk management regime and don’t forget to use technical analysis tools.

When just starting out, traders need education and support for learning the ins and outs of investing as a beginner along with a low-cost starting point. By offering fractional units, Olymp Trade has lowered the barrier to entry for investing. We invest in our traders by providing a wide range of support tools, free webinars and guides so they can learn, trade and advance on a platform designed to help them succeed. Try it out today to get started on your journey to financial freedom!

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