Whether you're a new investor or an experienced trader, knowledge is the key to confidence. We're here to help.
Our Thoughts on the Market podcast delivers thoughtful analysis on the events that shape the market. All brought to you by a variety of voices within Morgan Stanley.
What is diversification and asset allocation?
Every investor should begin with these two key ideas.
Diversification can be summed up with the familiar phrase: "Don't put all your eggs in one basket." Including different types of investments in your portfolio may help reduce your losses if one type—stocks, for example—take a hit when other investments like bonds remain steady or go up.
Investors achieve diversification through a process called asset allocation, which simply means figuring out how your funds will be spread among different types of investments, such as stocks, bonds, and cash. Diversification may reduce risk, but investors also want to earn a return, and so they need to strike a balance between risk and reward. Lower risk investments carry less chance of a loss but typically provide lower returns. Investors seeking higher returns typically must take on greater risk.
I need the money in: < 5 years
You may prefer this less risky approach because you won't have time to recover from a loss.
A conservative asset allocation aims to preserve a portfolio’s value with a high proportion of investments that are considered low risk, like cash or bonds.
I need the money in: 5-7 years
Taking on more risk may be appropriate since your portfolio will have a few years to recover from a loss.
A moderate approach seeks to achieve growth with modest risk by adding more stocks to the mix. Stocks may deliver higher returns but also carry the risk of greater losses.
I need the money in: 7+ years
High risk/high reward may be appropriate because you have plenty of time to try to recover from losses or setbacks.
An aggressive strategy is weighted towards riskier investments with the goal of achieving stronger growth.
The key to choosing how conservative or aggressive you should be is to gauge your risk tolerance, next up...
Understanding your risk tolerance
This tool illustrates the tradeoff between risk and reward that lies at the heart of investing.
Pay close attention to the "Worst 12 months" figure in the lower right. Would you be comfortable if your investments lost that much in a year? Would you change your investments or stay the course?
Are you a do-it-yourselfer? Want some help?
No problem, we've got the accounts, tools, and help you need to invest on your terms.
Select your risk tolerance and easily invest in diversified, professionally selected portfolios of mutual funds or exchange-traded funds (ETFs). And you pay no trading commissions.
Get started with as little as $500 (mutual funds) or $2,500 (ETFs).
Automated investment management
Core Portfolios uses advanced digital technology to build and manage your portfolio, based on your timeline and risk tolerance. It's a simple, low-cost way to get professional portfolio management.
You can open an account with as little as $500, or choose from other professionally managed portfolios.
Where can I find even more investing ideas?
Potential opportunities can be found almost anywhere. These easily accessible sources give new investors
a variety of different ways to find ideas.
Find opportunities by looking for market trends and market movers—stocks with a lot of trading activity—or check out market commentary from E*TRADE's own analysts and major news sources.
Another approach is to align your investments with your values or with economic and social trends. These are called themes, and we've highlighted specific investments for a range of different ones.
How do I place a stock trade?
1. Locate the ticker symbol
Enter a company name and get the ticker symbol
2. Check the price
Once you've found the ticker symbol of the company you're interested in, check the price and gauge the historical graph for volatility or growth.
3. Select order type
From the drop-down, choose Buy.
Select Preview to review your order and place your trade.