In a Nutshell: With its industry-specific jargon, an abundance of new technology, and countless companies and commodities, the financial world can be overwhelming to new or prospective investors. Founded in 2010, Benzinga is a valuable online resource for all things investment. The company’s priority is to present investment news in a simple and straightforward manner. We recently spoke with Luke Jacobi, Benzinga’s Director of Operations, who shared some tips for new investors as well as some pitfalls to avoid.
Many people can own up to having made a few financial missteps, and most have worked hard to get their money back on track. Finally, they reach a point where they have a little extra cash and want to start investing their hard-earned funds. While there’s always volatility to consider, investing is a proven way to grow money over time and the earlier you start the better.
But it’s not as simple as it sounds. The investing world is its own ecosystem with a plethora of investment options, industry-specific lingo, multiple exchanges, tons of companies, and cutting-edge technology. It can all be pretty confusing and overwhelming.
Thankfully, Benzinga is there for new and seasoned investors alike to provide investment and financial news in a straightforward and easy-to-understand style.
“Our goal is to make financial information easier to consume,” said Benzinga’s Director of Operations Luke Jacobi. “We see a problem in the financial world — especially in the stock market and investing — where the barriers to entry are incredibly high. We take the approach that we don’t talk down to our readers.”
Benzinga Offers a Wealth of News, Trading Ideas, and Commentary for Investors
With the goal of presenting financial and investment news in a straightforward manner, Benzinga hopes to provide consumers with the tools to educate themselves about particular stocks and the ins and outs of investing.
“Our readers aren’t going to get smarter about investing if we just say ‘buy this stock or sell this stock,’” he said. “It’s important to lay that foundation so they can make smart decisions on their own.”
From the time the website launched in 2010, Benzinga’s main focus has always been on covering the most relevant financial news, Jacobi said. This includes highlighting what key financial analysts are saying, getting the scoop on the latest moves from big players including Goldman Sachs and J.P. Morgan, and signal-boosting press releases on the latest fintech or startups.
Over time, as Benzinga’s readership expanded and its longtime readers became more investment savvy, Jacobi said the company began hearing feedback that site visitors would like more in-depth information about trading.
“Our readers were saying, ‘Hey, this article on Tesla is cool, but how do I buy a share? Help me get started investing,” he said. “So we started an investment portion of our site where we really dive in and provide a variety of resources to begin investing, including our experts’ opinions and third-party research.”
Jacobi said Benzinga lives and dies by reader feedback and it has been key to the website growing to reach more than 20 million readers.
“This whole branch of the website where we’re publishing 10 to 20 articles a week about how to start investing came directly from our visitors’ feedback,” he said.
Benzinga also features sections that focus specifically on various markets, stock analysis, investment strategies, and fintech.
Jacobi said Benzinga wants readers to be able to come back and always find valuable information no matter where they are in their investment life.
Valuable Tips for New Investors and Some Pitfalls to Avoid
As with any new endeavor, a little bit of expert advice can go a long way.
Jacobi offered some guidance for those who are new to investing or are considering investing in the future.
“On the individual stock side of things, we encourage our readers to first set up a paper trading account,” he said. “A number of firms do this — TD Ameritrade’s ThinkOrSwim program is one we like.”
Jacobi said a paper trading account is basically a stock market simulator where prospective investors can work with a play portfolio before diving into real-world trading. Consumers can buy stocks and make other investments and track them just as if they were real. He said it gives new investors a feel for the market and can instill confidence to take the next step.
Once a consumer is ready to start investing real money, he said it’s important to develop an investment thesis and to really consider what they want to accomplish with his or her strategy.
“Think about your thesis,” Jacobi said. “Why do you think the market is mispricing a stock, or why do you have an opinion on why a stock should be higher or lower? Are you a consumer of the stock?”
Next, he said it’s crucial for investors to stay on top of financial news and follow the companies they are investing in. Also, investors should explore whether a company’s actions are consistent with its stated priorities and the investor priorities, and to continually evaluate whether the priorities are changing.
On the flipside, Jacobi highlighted a couple of pitfalls new investors should avoid.
“Being overconfident is a big one,” he said. “Definitely take the time to think about whether you understand the reasons a stock should go higher or lower versus the rest of the market. And also understand why you could be wrong.”
Another common misstep is for investors to be overly active. Jacobi said it’s important for investors to remember that for a market like the S&P 500, a diversified investment strategy yields about an 11% return per year, so it pays to stick around.
He said new investors can see wide swings in prices on a daily basis, get concerned, and sell stocks too early. Or they might buy stocks that are volatile in hopes of a windfall. The most important approach is to stick to long-term horizons.
Overall, Jacobi said to remember that money compounds over time, and there are a lot of great fintech tools and resources from traditional brokers available to investors.
The Emerging Cannabis Industry is a Market of Particular Interest to Benzinga and Its Readers
Jacobi pointed out that the developing cannabis industry has grabbed the attention of Benzinga and its readers lately. As marijuana becomes legal in more places and continues to expand into the mainstream, it is becoming part of the consumer goods market. And more people are beginning to view it as a commodity, he said.
Cannabis companies are currently trading billions of dollars, and in the coming years a lot more money will be pouring into the industry, Jacobi said. It’s a very interesting area that is still surrounded by questions.
Jacobi also said the cannabis industry is poorly covered by the mainstream media, but, because of its interest to readers and the Benzinga team, the company recently launched a section of the website specifically for cannabis industry news.
“We think we cover the space pretty fairly,” he said. “There are a lot of bad companies out there as well as good ones. We are calling out the bad things we’re seeing in the industry and also highlighting the positive.”
Benzinga’s cannabis section features multiple new stories a day, covering everything from cannabis-related events, new companies in the industry, and of course the latest in cannabis stock developments.
Benzinga is even hosting a January cannabis investment in Miami featuring 40 of the top cannabis companies to educate investors in the space.
Whether you’re interested in exploring the emerging cannabis industry or simply learning how to set up a play portfolio, Benzinga can help investors navigate the sometimes confusing investment world with its down-to-earth financial news and commentary.