Whether through retirement plans or regular accounts, buying and holding stocks has always been a great way to build wealth. Most of us should be working with a financial advisor that we trust. An advisor is easy to find at most large national discount brokerage chains, for example, TD Ameritrade or Charles Schwab. There are also multiple advisory services and newsletters offering investment advice and recommendations. One example is The Motley Fool.

The general recommendation is that your stock investments should be diversified, meaning you should own a variety of stocks in multiple different industries. A stock is a share of ownership of a publicly-traded company. The number of stocks one should own to be considered diversified is anywhere from 10 to 30 stocks.

Most of us don’t have enough money saved to purchase shares from that many different companies. For those people, the best way to get some diversity is through Mutual Funds or Exchange Traded Funds (ETFs). When you buy a mutual fund share, the fund owns shares of many different companies. In the last few years, a new option has been to buy a portion of a share of a company. This has been made popular by the company Robinhood.

Growth vs. Value stocks. Growth stocks tend to be newer companies with unique and new products. Think of the FAANG stocks, including Facebook, Apple, Amazon, Netflix, and Google. These companies had phenomenal growth over the last couple of decades, and investors who bought shares early and held them made lots of money as the share values increased dramatically. Price/Earnings (P/E) ratios in growth companies tend to be very high, meaning that the stock price is much higher than the actual earnings, but investors anticipate earnings will be much greater over time. Value stocks tend to be more established companies with decades of stable growth. The stock prices tend to be more stable/less volatile. They often have a quarterly dividend payout to shareholders, which can limit the downside of the stock price when the market is unstable. P/E values on value stocks tend to be lower. These stocks work well in a more conservative stock portfolio. Value companies have more predictable earnings streams. Think of companies like DuPont, General Mills, and National Grid.

To get started in investing, reach out to a low-cost broker. There are plenty of brokerage firms that will allow you to buy stocks and get general advice without charging you a commission for each trade. The two brokerage firms I mentioned above are in that category.