Investing in Companies You Actually Like
For a novice investor, it can be difficult to decide where to put your money. There are so many options, it can be hard to answer the question, “what company should I invest in?”
If you’re a fan of a specific company—whether that’s Apple, Amazon, or Coca Cola, you may be wondering if you should invest in those. After all, putting your money behind a company you actually believe in seems intuitive.
Choosing companies you actually like to invest in is certainly a different approach than giving your money to a financial advisor who makes your investment decisions for you. But that doesn’t mean it’s not the right call. Let’s look at the pros and cons of investing in a company you really like.
An important factor when it comes to answering the question, what company should I invest in, is portfolio diversification. Portfolio diversity is the reason many investors don’t put all of their eggs in one basket.
The logic behind portfolio diversity is that while certain stocks can have a bad month—or a bad year—investors who own multiple stocks across multiple industries may be a little more sheltered from volatility than if they were invested in just one company’s stock. Because there’s a chance that some stocks will be thriving even while others take a hit (though, of course, this is by no means a guarantee).
With the uncertainty in the stock market and so many different investment options, sometimes it can prove prudent to use a financial advisor, like a member of SoFi’s planning team. As a consumer, you might know your favorite brand’s story, but you might not realize that implications of a given investment strategy. And that’s where a professional comes in handy.
The Importance of Research
If you do decide to buy your favorite company’s stock, make sure to do more long-term research into your chosen company.That means thoroughly research the stock’s returns over the last few years and reading industry insight. It’s not enough to just like the brand’s inspiring story or their great product, you want to understand why that stock is (or isn’t) a good buy.
Is a SoFi Invest Account Right for You?
If you’re not interested in stock picking, consider an automated investing account, with no SoFi management fees. Being a SoFi member entitles participants to complimentary financial planning so you can get the best of both worlds. At SoFi we believe everyone should have access to investing options. You can begin online investing with as little as $100.
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The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA /SIPC .