How to Start Investing with Schwab Stock Slices™

If you’re like me, the stock market seems utterly terrifying and confusing. As headlines flicker by, you may find yourself asking many questions: What is a hedge fund, and how do you short a stock? What’s going on with GameStop? How do you buy and sell stocks? Where do I even start? At this point, it may sound easier to forget about it altogether. But the reality is, if you’re a college student making some income, you have to do something with it. Something besides impulse buying on Amazon.com. 

Here’s a little bit of a run down: A stock is, essentially, a share of a company. When you “buy a stock,” you now own a piece of that company, and you are entitled to a fraction of its profit. The stock market is not quite a physical marketplace, but an invisible, nationwide “location” where investors can buy and sell their stocks. As companies make critical economic decisions, the prices of their stocks rise and fall. If you buy a stock and the company does well in the long run, the price of the stock rises, and you get more money out of the deal. If the company goes bankrupt, you lose the money you spent. Sounds easy enough, right?

Well… if you have any doubts or hesitations about the stock market, I have the perfect solution for you. With Schwab Stock Slices™ run by the Charles Schwab Corporation, you can invest as little as five dollars in some of your favorite companies! Buying a tiny slice of corporations like Amazon, Disney, or Facebook lowers the risk of loss, and  doesn’t put much on the line. After all, five dollars is not too much to gamble away, and you might even end up doubling it! If you’re unsure how to tackle the fickle stock market, starting small with Schwab Stock Slices™ is the way to go.

The past eight weeks, I’ve been engrossed in a competition with my mom. Every week, we each research and choose a company to invest just five dollars in using Schwab Stock Slices™. At the end of ten weeks, whoever has returned a larger profit wins and has to buy lunch. It’s not just a game though, it’s a learning experience about the stock market and how to be smart with money without having to worry about making crucial economic choices. Watching my five dollars slowly increase and decrease depending on the business and day has been super informative, and I now feel much more comfortable talking about stocks and how they work. 

Ready to start? Here’s all you need to know to get started on your investing journey:

  1. 1. Make Your Schwab Account!

    To get started, visit the Schwab Stock Slices™ website and open an account. This process takes about 10 minutes and is completely free. The site will ask you typical financial set-up questions, so make sure all of your information is easily accessible. After your account has been created and approved, you can link a bank account and transfer money into Schwab. The amount you want to start with is completely up to you!

  2. 2. Set Some Ground Rules!

    Before you begin, you’re going to want to have a game plan. This means asking yourself some important questions: How many stocks do you want to invest in? How often do you want to invest? How much money do you want to invest in each stock? I recommend starting with a set amount of money you’d like to split up between companies. After all, you can invest as little as five dollars in each. I, personally, choose one new company to invest in each week, but you can choose to invest more or less frequently. The ground rules are up to you, but it is always better to go in prepared.

  3. 3. Do Your Research!

    Before you start shelling out your money, it’s best to gather some information. The more confident you are with your decisions, the more successful you will be. Once you decide how many companies you’d like to invest in, take a look at the different options that Schwab offers. You can access this from the homepage of your account by hovering over the “Trade” tab and clicking on “Schwab Stock Slices™.” My recommendation? Diversify your portfolio. The broader the range of economic categories your stocks encompass, the less likely all of your stocks will fall in value. To choose a company, I typically start with picking a category like “energy.” I’ll do a quick Google search, like “best energy companies to invest in right now.” Once a few businesses catch my eye, I’ll delve a bit deeper. The Yahoo Finance website is particularly helpful in evaluating certain stocks with information like the stock’s history and its estimated return percentage. Just enter the ticker symbol (the lettered abbreviation of the stock) into the search bar and explore. Schwab also includes similar information on its website. I tend to look for a company that I think will perform well in the long run. Since stock values tend to rise over time, I want to make sure my companies will be sticking around for a while.

  4. 4. Start Investing!

    Once you decide which company to invest in, enter it into the Schwab Stock Slices™ search bar, and click the check box to the left of the blue ticker symbol. Next, press the green “Continue” button. On the following page, select your account, and enter the amount of money you’d like to invest in the company. The larger the amount, the bigger the percentage you own, and the more your account will feel the company’s impact. I also suggest selecting the “Reinvest Dividends” box, which continues to invest your earnings to potentially make you even more money. Finally, click “Review Your Selection” and place your order, and you should be all set! The stock will show up on the main page of the account where you can watch it grow (or shrink).

  5. 5. Watch What Happens!

    Seconds after you invest, you’ll get to watch in real-time how the value of your stock increases and decreases. From 9:30 AM to 4 PM on weekdays, the decisions of other buyers, sellers, and companies will influence the value of the small slice you just purchased. Eventually, you’ll be met with a choice: cash in and sell your stock, or hold onto it in case its value continues to rise. Personally, I’ll be playing the long-game. Fortunately, my five dollar slices don’t present too much of a gamble. Thanks to Schwab Stock Slices™, I am, truly, no longer afraid of the stock market.

So far, I’ve made a little over two dollars using Schwab Stock Slices™. After eight weeks, that may not sound like a lot. However, I’ll take it over a loss of money. I would highly recommend Schwab Stock Slices™  to anyone interested in beginning to invest in the stock market, and I hope this guide is helpful as you begin your investing journey. I’ve learned to be smart, careful, and analytical with my money. And… it’s looking like my mom is going to owe me lunch. 

Happy investing!