The Ultimate Guide to Investing in Blockchain Stocks
Investing in Blockchain and Cryptocurrency stocks, or stocks in any industry, can be an excellent way to legitimately grow wealth and enjoy substantially higher returns when compared to simply putting your money in an interest generating savings account. Buying stocks are a relatively easy process.
The challenging part of purchasing stocks is choosing the right companies that will provide the right return for you. Countless techniques and market-psychology methods claim they’ve perfected the formula for consistent success, however, you should always do what is best for your specific objectives. As Warren Buffett once famously said, “Buy into a company because you want to own it, not because you want the stock to go up.” Judging by his company’s stock performance, it’s safe to assume that this rule has worked out quite well for him and his investments. Below, we explore the required steps that outline how to invest in Blockchain stocks.
1. Decide if Stock Investing is for you
Stock investing can be a time consuming endeavor. Perhaps you either do not have enough time to dedicate to stock investing, or you prefer a more passive investment vehicle? As such, determining if investing in stocks is something you should even do is the first things. As it relates to Blockchain stocks, maybe you already hold of some of top coins on our Cryptocurrency List and would like to learn how to invest in Blockchain stocks to diversify your crypto investments?
Do you think that stock investing is a good fit for you? Are you a hands-on investor willing to devote countless hours to master the art of Blockchain stock-investing?
2. Determine Your Risk Tolerance
Once you have determined that stock investing is something you would like to try, you should asses your risk tolerance. Everyone has their own unique risk tolerance and this means that there is no one-size-fits-all approach to stock investing. Some people demand a high return on their investment, thus, they must be willing to invest in significantly riskier stocks. Others, do not feel comfortable buying higher risk stocks, and settle for lower risk stocks that provide lower returns. The general rule of investing returns is: Higher Risk = Higher Returns; Lower Risk = Lower Returns.
Stocks of emerging industries, such as Blockchain Technology and Cryptocurrency, are generally susceptible to carrying risk and Blockchain stocks are not immune to this. There are many different categories of blockchain stock, such as Blockchain and Cryptocurrency Penny Stocks and Blockchain and Cryptocurrency Large Cap Stocks. The greater risk commonly found in blockchain and cryptocurrency stocks is typically associated with factors such as relatively younger companies, low stock trading volume, and untested market adoption.
What is your risk tolerance for trading Blockchain stocks?
3. Set a Budget
It takes money to make money, and as a new Blockchain stock investor, you may be wondering “How much money do I need to start investing in Blockchain Stocks?” or “How much money should I invest in Blockchain Stocks?” The answer to each of those questions comes down to your unique budget and risk tolerance.
One factor to consider when setting a budget to invest in Blockchain stocks, is the share price. Share prices can range from a few pennies, to well into the thousands and even hundreds of thousands. Most Blockchain and Cryptocurrency Stocks have a relatively low share price. This can be both a positive and a negative. A positive of a stock with a small share price is you are able cast a wider net (because you can buy more) and realize greater gains when there is a sharp increase in price. Conversely, a negative for stocks with lower share prices is that they tend to have greater volatility. This means that prices tend to fluctuate more sizably and you could theoretically realize a greater loss more quickly. While tools such as a Cryptocurrency Calculator exist for crypto investments, stock investing requires a bit more effort.
What is your budget for investing in Blockchain stocks?
4. Open an Account
The next step is to sign up for a brokerage account (assuming you do not already have one). You may already have a brokerage account used to trade other non-Blockchain related stocks, or you may have access to stock trading via a retirement account.
Brokerage accounts are where you actually buy and sell your Blockchain stocks. The offerings vary from a standard “cash account” which requires you to pay-in-full for your stock trade, to a more advanced “margin account” that allows you to borrow funds to trade on. Assuming that you are just getting started, it is wiser to stick to using a “cash account”, until you are comfortable enough with advanced trading techniques.
Choosing a brokerage often comes down to personal preference. Some brokerages offer more bells-and-whistles than others, however, unless you are doing advanced trading, any one of the major online brokerages will work just fine. Some brokerages are even cryptocurrency friendly and include features such as Cryptocurrency Charts. Regardless of which brokerage you choose, all major brokerages will provide you with the opportunity to trade Blockchain stocks.
Here are many great options such as some of the more well known brokerages listed below:
5. Select and Purchase Your Stocks
Once your brokerage account is setup, it is time to start picking your desired Blockchain stocks. Once you have found a company that you like, we recommend you refer back to Step 3. Research. Review both basic company information and the company’s required public filings. If you have reviewed the above information and you feel comfortable about the company, then you are ready to purchase your stock (also known as a share of ownership).
Purchasing the Blockchain stock. Although each online brokerage has a different way of actually purchasing stocks, it is usually something intuitive that involved visiting an “Order” page, where you will input the stock symbol, order type, quantity of shares, etc. and then process your order.
Now that you know how to invest in Blockchain stocks, have you selected and purchased your Blockchain stocks?
6. Determine and Commit to a Plan for Your Blockchain Stocks
Congratulations! You have purchased your Blockchain Stocks. Does that mean you are done? No! Blockchain stock ownership can be an emotional roller coaster. Imagine you see the price of a stock you just purchased start to drastically drop. You may be tempted to cut your losses and quickly sell; only to later see the stock price rise again to a much higher price that your original “buy-in” price. The more you keep your emotions out of your decision, the better the outcome of your decision will be.
In this stage of Blockchain stock ownership, creating a plan and committing to it plays a very major role. When one of your stocks experiences a sharp price movement, do you quickly sell or buy more, or have you committed to a plan that first requires you to pause and find out what triggered the event before making any moves.
Do you have an investing plan that you have committed to for your Blockchain Stocks?bo
Congratulations, you are now a Blockchain Stock Investor!