I have started publishing posts about things like portfolio diversification, economic cycles and macroeconomics, but then I realised that there is a huge % of people which do not know how to start investing.
I got a lot of questions about very basic things like how to start investing, how to buy a share in a company or what are the different ways to invest money. Of course everyone has been new to this and today I have the chance to explain to you how to invest in shares in the stock market starting from the very beginning.
1. Educate yourself
Before you actually start investing money in the stock market or anywhere else you need to know what you are doing. Luckily I have read a lot of information in the last couple of years and will summarize the ones that helped me the most so you can benefit from them.
The first thing I advice you to do is head over to Youtube and watch Ray Dalio’s videos about the economy and his principles. They provide notorious amount of value made in a very simple way so every beginner will understand them. And the fact that Dalio himself has made those videos makes them so much more worth watching.
After you finish watching Dalio’s videos it is time to head over to Preston Pysh’s channel on Youtube and watch his series of video courses. They explain the basics of investing in stocks very well and are very beginner- friendly.
Now you should have decent basics and you can dig a bit deeper and read some books on the subject. I have all the books you need to develop a deep knowledge about the stock market recommended on my blog – https://0tofreedom.com/books/
Don’t forget that Google is going to be your best friend along the way. I cannot count how many different questions I have typed in into the Google search. And still continue to do so, no one knows everything and we learn during our entire life. The moment you stop learning is the moment you start falling behind.
2. Research different stocks
Now that you have some solid fundamentals it is time to go in and check how the different stocks are performing. What I like doing is make a list of my favourite companies and start looking through them on Yahoo Finance. Let’s say you are a big fan of Apple. You write down in Google ”Apple stock stats” and the first thing that should show up is this https://finance.yahoo.com/quote/AAPL/key-statistics/ . Now it is time to research all the statistics you now know about like their P\E ratio , their P\B ratio and so on. You can also check their balance sheet , their income statement and a lot more in there.
3. Open an account with a stock broker
So depending on where you are from there are going to be different options for stock brokers. A simple Google search is going to answer your questions. Just write down ”best stock broker [insert country]” and you will have your answer. If you are from the UK good options for beginners are https://freetrade.io and DeGiro. The latter also operates in a lot of countries around Europe. To register for DeGiro click here https://goo.gl/kR1JCx and you are also going to get £20 off for signing up with them. It is not a lot but in the long term everything adds up. I planning to make reviews of all the stock brokers in the UK so stay tuned.
4. Start building your portfolio
Now that you have the knowledge and an account with a stock broker you can start slowly building your portfolio. I advice you to start with a small sum and gradually get into different stocks. Remember that the stock market is volatile and it can go up but can also go down. That is why the best approach is to have a systematic investment plan and stick to it for the long term.
That sums up how to actually start investing in shares of different companies. When you first thing about it it sounds very scary and somehow out of our reach. But with the advancement of technology it has never been easier. Today we have all the information in the world on the tip of our fingers and it is up to us if we want to use it or not.
Hopefully you had a good read and you learned the most important thing in investing- how to actually get started. If you have any questions don’t hesitate to contact me I am happy to answer. If you want to stay updated on new posts make sure you follow my blog.