Public is a new kind of stock brokerage that enables you to buy any stock with any amount of money — commission free.
Why should I care?
Buy slices of stock with as little as $1
Public makes investing free and social, and slices stocks into tiny bits so anyone can own a piece of the companies they believe in.
Go from Zero to Invested
Our Zero to Invested Packs have been created in partnership with Public, and they’re available in text and audio in the Finimize app. Get access with 90 days of Finimize Premium for free, and you’ll discover the tools and insights you need to become a financially savvy investor. Here’s a preview of our Pack for a taste of what’s in store…
Master the investing basics ?
Rule number one of investing is all about balancing risk and reward. If an investment is paying a good return, it’s almost guaranteed to be higher risk than one paying a more modest return. C’est la vie. Your return is literally your compensation for taking on that risk. So you need to figure out what level of risk you’re happy with. In general, if you’re investing for the long term, you should be able to tolerate higher risk because you’ll have more time to recover from any short-term losses.
Let’s kick off with stocks (also known as shares or equities). Owning a stock means you own a very small part of a company, and can get a portion of the company’s profit paid to you periodically as a dividend. Stocks are often lumped together to make an index, some of which have become very famous over the years. For example, the Dow Jones Industrial Average aims to show the average performance of 30 top American stocks. When people talk about “the stock market” being up or down, they’re generally talking about the performance of an index like this.
Building your perfect portfolio ??
Building a diversified portfolio means not putting all your eggs in one basket. Instead, spread your money across several different assets – and, fingers crossed, any losses will be offset by your gains.
If you’re sure you want to invest and if you’re overwhelmed by the sheer volume of different investments out there, the best advice may be to just start. Select a simple portfolio of broad stock and bond indices, allocating more to stocks if you’re feeling lucky and more to bonds if you’re more cautious. Or you might prefer to take the riskier step of buying shares of a few companies whose businesses align with your passions or beliefs. For instance, some investors are increasingly keen not to fund tobacco or oil companies with their money.
Once you’ve set up your portfolio, you can easily track how well it’s performing online via your brokerage account. Naturally, you’d rather your pot went up rather than down, but if you find your stash is worth 5% more than the last time you checked, how do you know if that’s really a healthy performance? Should it be up even more?
In practice, you should compare your investment return to what you could have made if you’d invested in an asset with no risk of losing your original stake (theoretically). Professional investors call this the “risk-free rate” – and generally use US government bonds since the American government’s never (yet!) failed to honor its debts.
And you might want to compare your stocks’ performance to the stock market as a whole (i.e. the MSCI World Index).
When you’re making that comparison, keep in mind that professional investors focus on risk-adjusted returns such as the Sharpe ratio, which is basically returns divided by volatility (how much prices swung around).
If, say, your investment portfolio gained 10% last year but was at one point down 15%, you’d have had a worse Sharpe ratio than if your portfolio gained 10% and never fell more than 1% over course of the year.
Investment Choices ?
A brokerage account allows you to buy and sell a whole host of assets, including shares of single companies.
It provides a doorway into the markets. Your broker is the person you contact when you want to buy or sell – whether that’s by mobile app, website, or good old-fashioned telephone. You tell them what you want to trade, and they make the transaction for you. For example, if you wanted to purchase $1,000 of Apple shares, they’d send that request to a stock exchange – where your order to buy Apple would be matched with orders from people looking to sell.
That’s all for now. But complete your journey to getting fully invested with Public, and you’ll get to enjoy 90 days of Finimize Premium for free.