Stock investing for dummies

The Stock Market for Dummies

Basic concepts to understand it

Have you ever heard the word dummy? Recently, this term has been applied to those who are beginners and lack basic information on a subject.

The subject of investments, more specifically that of the stock market, is a bit complicated for some, so we will try to explain it in the simplest way possible so that you become familiar with it.

What is that about the stock market?

The stock market is a type of market in which you can buy and sell a wide variety of investment instruments, such as shares, public or private bonds, certificates, or participation titles, among others.

It works with the dynamics of the free market, that is, through supply and demand. The setting of prices and the purchase and sale of said investment instruments are made through brokers, or stockbrokers; they are in charge of carrying out the operations within the trading platform, or data, which is the interface for taking advantage of the technological advances offered by the stock markets.

Bidders are usually corporations that offer securities or shares to raise funding for new investments.

The plaintiffs are those who buy these securities, becoming shareholders of the company; that is, they become partners and therefore receive dividends, which are part of the benefits that the company obtained from the investment.

The fluctuation is something that must be taken into account when investing; it depends on supply and demand and is how prices rise or fall. It is important because the dividends you earn will depend on it.

And if I don’t know anything about finance, can I invest?

The stock market has been expanding so that everyone can access it, but it is really aimed at experienced investors.

Currently, there are simple tools to use to invest in assets or obtain benefits if you have the knowledge and experience.

For this reason, if you are inexperienced, it is better that you consider investments that do not represent as much risk as the stock market.

You can start investing in government instruments, such as CETES, since these options report fixed or predictable returns.

If you have already decided to invest, here are some tips for you to start being a good investor.

  • Patience and strategy. You must take into account the risk you are taking.
  • Don’t affect your family’s economy. Do not put at risk the resources you need for daily expenses.
  • Financial education. Apart from advising you with experts on the subject, learn to understand how the stock market works.
  • Set your goals. Define short-, medium-, or long-term strategies depending on what you want to achieve.

To invest in the stock market, you need market knowledge and solid guidance.

Do not risk if you are not willing to lose. If you find out well, over time you will surely be prepared to venture into higher-risk investments.

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