Investing in America: Uncovering Hidden Gems

Estimated read time: 4 minutes

The American stock market is a great place to find some hidden gems, even though 2018 ended on a bit of a rough note.

After a rally earlier in the year, things got a bit bumpy due to various political and economic issues, including rising interest rates.

These issues and concerns have carried over into 2019 and are still affecting the market now. Experts predict continued political concerns will add to the volatility of the market throughout the year.

Despite the market's volatility, the American economy continues to soar, although it is starting to slow down a bit. Experts predict it will continue slowing throughout 2019, but they don't expect a recession this year.

Technology continues to evolve as well, and that affects the stock market. Fintech is making waves, and traditional business models are changing. Now is the time to be investing in innovative companies with a good chance of changing the way things have always been done.

How to Invest in America's Stock Market

Let's face it: the American stock market can be quite intimidating if you don't know what you are doing. That certainly doesn't mean you should stay away from it, though.

When you invest in the stock market, you are essentially buying a little bit of ownership in a particular company. It's wise to diversify your portfolio by investing in multiple different investments instead of making a large investment in one company. Going all in on one investment can be catastrophic if something happens and the stock prices plummet for the only company you invested in.

To invest in the American stock market, you will need a broker. Stock exchanges are required to be done by licensed professionals only, which means you will have to pay someone to do this for you.

You can choose from a variety of brokerage options based on how involved you do or don't want the broker to be in your investments. It's even possible to use a virtual broker online if you would rather handle your investments online instead of by meeting with your broker. You will also need to keep the fees in mind so you have a clear picture of what it's costing you to invest.

Do plenty of research before choosing a stock to invest in. Your broker should be able to help you identify what investments are wise at the time, as well as which ones to avoid. When you are ready to buy, it's common to buy at least 100 shares at a time, which is known as a round lot. Buying less than 100 shares is referred to as an odd lot and can lead to additional fees. Some brokers won't even let you buy fewer than 100 shares.

Once you're ready to buy, you have two options: buy at market or buy at limit. If you buy at market, you'll be purchasing your shares at the current market price. If you buy at limit, you tell your broker how much you are willing to pay for certain shares and they'll keep an eye on things until your requested price is available. There is, of course, no guarantee that the stock you have in mind will ever hit the magic number you choose, though.

When you are ready to sell, you have the same two options: sell at market or sell at limit. Similar to buying, you have the option to either sell your stock at the current market price or tell your broker how much you want to make and they won't sell it until you are guaranteed at least that specific number.

America's Hidden Gems for Investors

Interested in unique investment options? If you know where to look, you can find some hidden gems. Here's a few places to look.

Tax-Free Bonds

When a public entity needs funds for a certain purpose they might sell bonds to finance the project. There is relatively low risk involved with investing in these bonds, and while they aren't the option with the highest interest rates, they do pay more interest than a savings account. An additional benefit is you don't have to pay federal income taxes on the interest you earn, and you are sometimes exempt from state income taxes, as well.

Commodities

Would you like to invest in a product of the earth – literally? Investing in commodities means you enter into a "futures contract" in which you invest a certain amount into a raw earth product, like crops, livestock, or metals, with the agreement to buy or sell these commodities for a specific price in the future.

Real Estate Investment Trusts (REITs)

Do you like the idea of investing in real estate but also want to make a liquid investment? REITs might be for you! When you invest in REITs, you are buying shares in commercial real estate, similar to buying shares of a stock. With REITs you get the best of both worlds: you can reap the benefits of investing in real estate, but have the flexibility to buy and sell easily at any time.

Diamond in the Rough

There are lots of investment opportunities available in America. If you know where to look, you can even stumble upon some hidden gems that could make for some great investments.

Whether you are looking to make some extra money to fund your international or domestic travel dreams, have dreams of funding your own business someday, or are simply preparing for retirement, investing is a great way to watch your money grow.

While it's impossible to see into the future, 2019 does seem like a relatively stable time to start investing if you haven't already, so pick some investments that interest you and get started!

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