Everyone can learn to invest in the stock market.
One of the wonderful things about this age of communication and information is that, as it progresses, knowledge is democratized. It allows us mortals to access the highest specialized knowledge, either through payment or through free resources available on the web.
This makes stock market investing accessible to the public, who provide the capital for the financial world. Thus, anyone may learn how and where to invest in stocks.
Every investor wants to know how to invest in the stock market from home. With so many resources for beginners, investing online has become the new way to reach the stock market.
How does the stock market operate?
In all this, one of the questions that you could be formulating is about the way in which the stock market works. We have already talked about this before in other entries, such as Stock Market: Investment Option,where I explain it in greater detail. But if you’re new here, I’ll give you a summary, and that’s how we get in tune.
The stock market operates according to three large groups: investors, companies, and intermediaries. Everyone who participates in the market, in one way or another, fits into one of these three segments. And to simplify it, I explain it to you as follows:
- Investors: people who invest in capital or money to make company projects come true, taking positions such as the sale or purchase of shares or the acquisition of any other transaction instrument in the market.
- Companies: These are the commercial entities that create the projects that are “sold” to the public so that they can participate with their money, with the commitment to remunerate them with growth and financial profits.
- Intermediaries: They are institutions or people that are in charge of making investors and companies find themselves in the market to transact.
In this sense, each one of these actors converges in a space of capital offers and demands, and every time a supply coincides with a demand, a transaction is created. The most common is the sale and purchase of shares.
Options to learn to invest in the stock market
To all this, one of the main questions that may arise is: what options are there to learn to invest in the different stock markets that exist in the world? And for this, the answer is extremely broad. But in the same way, it can be grouped into three large groups: books, schools or courses, and simulators.
Each of these has advantages and disadvantages, of course, because not everyone can benefit from them and because each one adapts to the unique reality of the person who acquires it. For example, learning about the stock market through a stock market simulator differs from learning it alone with a book.
However, my recommendation is that you approach the subject from all three perspectives since, without a doubt, you will have to read, you will need the intervention of a professional in this type of matter, and you will have the opportunity to simulate the different realities of the stock market. Therefore, you can investigate, through our favorite guy, Google, the available options that you have.
In all this, my suggestion is that you start with books, then move on to courses, and finally simulators. If you carry out this, I understand that you will be better off. You don’t have to do it exactly as I tell you, and you can start where you think is right; however, I firmly believe that through this path, you save money, time, and hard times.
Steps to invest in the stock market
Taking into consideration the way it operates and the options you have to learn to invest in the stock market, I want to offer you the steps you can take to invest in it. Like the options that I just mentioned, you don’t have to follow them to the letter, but you might well have an idea of how to get started in this world of investing in stock markets.
In fact, as I mentioned in previous paragraphs, learning to invest in the stock market from scratch is not difficult, but it does mean that you have to do some things like read some books, take some courses, and test investment simulators. But this is more than just capital; this is related to how to learn to invest money wisely.
The way in which you can carry out the different actions so that your money really represents a benefit for you and your personal or family financial stability Therefore, by giving you these steps, what I am looking for is that you head towards what really adds value to your personal financial management.
Step No. 1: Set aside the money to invest.
The first thing you have to do before starting this whole process is set aside the portion that you want to produce. Which must be “free” and dedicated exclusively to the investment you are going to make.
Do not make the mistake of investing sensitive money within your financial structure, since in every investment there are levels of financial risk that you will face that can ruin your capital. In Spanish, you can lose everything, and if this can happen, then you have to try to affect your cash flow as little as possible.
For this, you can create a one-year savings plan in which you gradually set aside the amounts that will make up the large capital that you are going to invest. In fact, doing it this way guarantees you two basic things: 1: capital; 2: that you learn everything you need to invest your money in these investment spaces.
Step No. 2: Identify the topic or industry in which you are going to invest.
The great investor and one of the richest men in the world, Warren Buffet, says that you should not invest in what you do not know. Because you don’t know what you’re getting into. And this is very logical because not all industries are the same and have a particular approach.
I will give you an example, as follows: Imagine that you want to invest in the ice cream industry, and the company in which you are going to put the capital does not have the equipment to transport it with the necessary refrigeration, but you see that it is a “good company” and that it gives you “good results”. By not knowing what the equipment requirements are, you can easily lose your money.
Therefore, the recommendation of this investment giant is extremely valid and timely. And with this, it’s not that you have to be an expert in the industry in which you are going to invest, but that you have at least basic notions of its operation, so that you have the necessary elements of judgment when making a decision with the money that you’re going to put to work.
Step No. 3: Choose a broker or stockbroker.
The choosing of a stock broker, who will represent you in the market, is a crucial step in entering the stock market.This individual or company will represent you and implement your positions (short, long, etc.).
Since there are brokers who contribute and those who take advantage, you must first investigate the brokers’ offers and legal guarantees before making a smart choice.
I have already talked about this before in the entry, How to Choose a Stockbroker,” which you can access and see in more detail what I present to you. However, the summary logic is that you have to do your homework and investigate, and based on these results, you can choose appropriately.
Step No. 4: Invest and wait
Finally, the time has arrived to invest your money. Once you have money, a topic or industry, and a stockbroker, you can start capitalizing the company or collection of companies that drew your eye.
This is the first of the steps, and you have to keep in mind that this is not from now to tomorrow, nor will you become Warren Buffet in a month. This takes time; therefore, you have to wait. The market responds to thousands of variables that make it fluctuate from one side to another, and it is possible that before those moves, you feel the urge to take a certain action.
However, the common premise is that you have to wait and let yourself develop your position in the market. At this stage, your broker will guide you and give you all the information you need. This individual wins and loses when you win, thus they want you to win.To improve your actions, describe your doubts and uncertainties about the method you used.
Learning to invest in the stock market does not have to be traumatic or unattainable. On the contrary, with this new era of communication and information, we can all enter this complex and exciting world of investments.
For this, you have three basic learning options: books, courses, and simulators. Although my recommendation is that you go in this same order so that you cover the stages of the process and are successful in it, concomitantly take the following steps:
- Put the money away.
- Identify the industry.
- Choose a broker.
- invest and wait
If you carry them out, you will have a process that will add value to your personal financial management. But I understand that you want to delve into the subject, so I invite you to purchase the book Learn How to Invest in the Stock Market, written by Mariano Gabriel, by clicking on the image and leaving your comment in the form below.