A diverse retirement portfolio should include stocks. While generally considered high risk, stocks have proven throughout history to yield higher returns than bonds or any other investments. Whether you’re just starting your retirement investing or diversifying your portfolio, there are important things to remember before…
Whether you’re just starting your retirement investing or diversifying your portfolio, there are important things to remember before buying stocks on your own.
Hire a professional
When purchasing stocks, it is customary to use a stockbroker. Brokers range in price based on their responsibility and level of involvement, and they are licensed to buy stocks on behalf of their clients for a commission. It is wise to ask around and do research on brokers, just like you would a doctor or mechanic.
Different types of stockbrokers
Types of brokers include:
Different types of stocks in which to invest
You can invest in a variety of stocks, mutual funds, index funds, and ETFs (exchange traded funds). You also have the option to buy individual stocks in one company. There are pros and cons to this, which you should discuss further with your broker.
When you purchase individual stocks, there are no ongoing fees once you’ve paid your broker, and you have more hands-on control. You can buy and sell whenever you want, and you can learn how the company in which you’ve invested operates. In general, individual stocks are riskier than other funds, but they often pay out more.
There is a downside to individual stocks, though. You don’t have an experienced broker guiding you, and if you’re invested in only one company and it goes belly up, you’re left with nothing.
If you want to invest in stocks but are looking for something a bit less risky, consider:
As usual, be sure to consult with a qualified financial professional to see if stocks make sense for your investment portfolio.
Equifax maintains this interactive forum for education and information purposes in order to allow individuals to share their relevant knowledge and opinions with other members and visitors. We encourage you to participate in discussions about personal finance issues and other topics of interest to this community, but please read our commenting guidelines first. Equifax reserves the right to monitor postings to the forum and comments will be published at our discretion. Do you have questions or comments about your Equifax credit report or customer-service issues regarding an Equifax product? If so, please contact Equifax directly. All opinions and information expressed or shared in blog comments are solely those of the person submitting the comments, and don't necessarily represent the views of Equifax or its management.