Don't know how to get started investing in the market stock?

Don't know how to get started investing in the market stock?

Learning how to invest in the market stock is been the best thing I ever did. It helped me to grow my wealth, feel confident about my financial future and freed from working longgggg hours in a job.

I don’t understand why schools don’t teach kids how to invest, but in my opinion, it should be a priority in out educational system. Today, I’m putting on my teacher cup teaching you how to start investing in the market stock. Please, don’t call me Professor Rudy 

The market stock is a wealth accelerator that required little time from you but pays exceptionally well. It’s not a coincidence that almost a quarter of the 400 names on the Forbes list of richest Americans work in investing and finance sector.

I would like to make clear that I’m not trying to push you to make a career out of investing. Simply put: I think every person with savings — no matter which age or amount of money — should invest in the market stock.

I also believe that If you aren’t investing in the stock market yet, you’re leaving a lot of money on the table and risking never retire comfortably.

But with all that said… investing is not as easy as deposit some money in a brokerage account. You need a strategy. So, in today’s post, I’m explaining the very basics — how to get started investing in the market stock without the fear of losing money or doing something “silly”.

First, why is so important to invest in the market stock? Here the benefitS:

• Multiply your saving with minimal effort.
• It helps to reach early retirement.
• Make more money with less work.
• It’s the most tax efficient income.
• Steady cash flow.

For those reasons, I truly believe that market stock investing is an essential ingredient for people that want to retire early and wealthy  — no matter how much money you have.

So, in this post, I’m laying out a basic stock market investment guide for beginners. And specifically, how you can get started right away, without using expensive financial advisers or managed funds.

Game on, my friend.

GET AN IDEA ABOUT WHERE TO INVEST

There are a lot of markets where to invest, and can be confusing for the first time investors. Most people believe, that USA is the best option to get started.  In part is true, but can be expensive.

If you are an American, investing in the USA market is your best and easiest option, but for outsiders, you better start looking at your local market first.

The reasons are:

1. It’s cheaper to trade with a local broker.
2. No need to exchange your money as the local market trades with local currency.
3. In site assistance. You can walk in your broker office to ask for help if you don’t understand something.
4. You know and use the products of many companies listed on the local stock exchange, it’s a no-brainer to invest on them.

There is no shame to start locally. Once you gain confidence and desire to expand to international markets, you’ll have already some basic knowledge to help you expand.

Having said that, if you’re living in a small country with limited listings than is better you start off by opening an international brokerage account. Also, some stock exchange doesn’t offer ETFs (exchange-traded fund) which are the cheapest option to diversify your investments.

ETFs track an index, offering an excellent diversification with the most valuable companies in that sector. Basically, by buying an ETF, you’re buying all the company within that index for a fraction of the price.

For example, the Vanguard S&P 500 ETF (VOO) track the most valuable company in the USA, and management cost is a mere 0.17% per year. Yes, you can buy all the best companies in the USA throughout an ETFs with a single transaction and a very low annuity fee.

OPEN A BROKERAGE ACCOUNT

In order to buy stock, you need the assistance of a stockbroker who is licensed to purchase securities on your behalf.

When investing locally, I recommend using a broker affiliated with your bank, if available. It’s convenient to transfer money from and to your bank account.

Most local brokerages charge similar fees, and in my experience is not worth to look at the pennies.  Some broker might have a better trading platform than others, but for beginners isn’t that important. What is important is to get started without procrastinating.

Now is the time to take action, are you ready? Call your bank asking if they offer brokerage services.

Don’t forget to opt for an online account so you can trade from the comfort of your couch. If you aren’t a tech savvy, you can use a full-service broker placing orders by phone.

International brokerage. There are reputable international brokers when planning to invest in the world markets. The majority are located in USA offering very low fees and access to multiple markets.

However, there is some extra paperwork to get started, plus you’ll have to transfer money incurring international fees and in most cases, convert currencies that add another layer of cost.

Keep in mind when opening an international account to select your home country currency if available. If not, go for US dollar as the majority of stock trade in the New York Exchange.

GET EDUCATED; KNOWLEDGE PAY THE MOST

Now you’re ready and so much excited to buy your first stock. Welcome to the investor world!

But before bluntly buy some stock, get yourself educated.

You don’t need to get a diploma or attend university (I think don’t exist one for investing) for years, simply learn some basic and invest with common sense. before jumping in. Just think about it; would you ever plan a dinner with your friends without recipes?

Just think about it; would you ever cook for your friends without recipes? Stock investing isn’t any different.

I know how attempting is to get started, and that is a good thing because it means that you’re motivated and eager to make a change to your financial life. However, you want to have a clear strategy of entry and exit, so to keep the emotions under control.

You might know this, but is worth repeating; investing is a very emotional experience. Seeing your portfolio stocks going up, feels great. On the other hand, seeing your stock going down not only feel depressing but might affect your personal life such having a bad mood or even not be able to sleep.

The stock market goes up and down all the time, something similar to a roller coaster. That’s is how it is, and you can’t change it. But what you can do is to keep your emotions in check by writing down a crystal clear strategy for your portfolio.

So, once the stock market goes in correction, you don’t panic. Instead, calmly you add in the position. At the core, investing is a simple equation; Buy low and sell high.

Look, when I first started, I was buying and selling stocks all the time feeling so nervous about any price changes. Over the years, I learn to accept the mechanic of the market stock, adapt to it, and benefiting from my strategy.

With time, not only you’ll get better, but also feel proud of your achievements. Remember, this is a journey, not a destination.

Below, few articles to get you started with your investment journey:

• Couch Potato Investing – The lazy way to wealth
• How most investors lose money in the market stock
• Do you want to invest in good stocks? Use common sense

Have fun!

http://smartmoneytoday.com/money/grow-your-money/stock-market/how-investing-market-stock-steps/

When Is The Right Time to Invest in The Market Stock - Smart Money Today

When Is The Right Time to Invest in The Market Stock - Smart Money Today

Jump in the market stock at the wrong time and you might face a loss of 12% in 24 hours

It’s not surprising that first-time investors often worry about the timing of their initial stock purchases

Now a day, the global economy is more interconnected than ever, in fact, you will notice a global trend of boom and bust in any market stocks over the years.

Most money websites and so-called “expert”, will preach about investing a small amount of money every month over an extended period, so you average out the up and down of the market stock. For the average investors that are happy to invest in ETF or funds might work, but what about the investors with a lump sum of money?

You might just have sold a house or heritage some money, and you are puzzled about timing investing in the stock market.

So, what is my opinion about buying on your first share?

Time is on your side

I firmly believe and suggest you to invest your money in stocks for the long run. Over the long haul, the compounding returns of a well-chosen investment will add up nicely, whatever the market happens to be doing when you buy your first shares.

Investors that try to time the market, buying and selling stocks often, are setting them self up for losing money in the stock market.

What drives stock prices up is ultimately profit. In a downturn moment, solid companies with excellent profit prospect will not lose much during the hard times, and in the long run, the share price will go up and up.

So, the first rule is to buy shares of profitable companies. Avoid any start up or corporations popular at the moment, instead, use fundamental analysis to choose the right stock.

Here the email I got from a retired man:

“I’ve been on the sideline as the market went up in recent years, from 2009. My money is sitting in a saving account producing nothing, but I’m afraid to buy the stock at the top and lose big.

Should I invest now or wait for a crash to get into the stock market?”

Timing the market stock is impossible, no one knows where the market is heading. It is like guessing the next numbers for the lottery, it is a gamble, and you shouldn’t gamble with your savings.

But there are patterns over the years, and before we have seen sudden declines in the stock market up to even 16%, before turning around and reach a new height. That doesn’t mean another surge will follow the next downturn.

The fact is, while we know this bull market will end at some point, no one knows when that day will come.

My advice is, develop a strategy that allows you to reap the reward in the long run weathering the up and down of the market stock, so the best time to invest is now little and more tomorrow when the market correct.

Change of Price Create Opportunity

Value investors have few opportunities to buy share during a period of corrections every year. From my analysis and experience, I have identified in average between one up to three times per year occurrences that offer entry points to investors.

The important question is: “How to identify a buying opportunity in the stock market?”

The sudden drop in the market stock for most shares is causing by internal and external factors.

Internal factors are related to the country economic and social condition. For example, a terrorist attack or export figures down can cause the stocks to drop immediately.

I would say, any bad news about the internal economic condition are an alarming bell for investors, and in this case, I would stay away from the stock market.

Instead, the benign “bad news” are for example a terrorist attack in the country, a storm, a flood or any social/political bad news coming from other nations that aren’t partner with the country you invest in.

The negative news will cause a correction in the stock market that has nothing to do with the economic fundamentals of the country and companies listed on the stock market exchange.

External factors are related to foreign affairs, foreign stock market and other nations. Because the world is interconnected and the speed of news is fast, your local market stock gets affected by the major international crisis.

An example these days is the slowdown in China with a massive sell off on the Shanghai exchange, spreading worries to investors in other markets and ultimately affecting their market stock. Negative news must be taken into consideration, even if you are investing in the another side of the globe.

An external factor like a war in some middle east country usually isn’t going to affect your investments.

In this case, I add shares to my portfolio. This is called trading stocks – buying and selling.

The important principle here is to exploit the mismatches what people think the stock is worth now and are willing to pay in near future. You want to buy stocks at the low price and sell it in the future at higher price getting a profit.

Who first have the information makes the money, and it isn’t you.

News that aren’t useful to you are:

• The announcement about a business; losing legal challenges, releasing earnings or new patents.
• Technical issues related to the administration of the stock; buyback, split, mergers, corporate offers.

I mention earlier these information will be irrelevant to you because you will be the last person to know, and the last person is always losing money. Before you, there are executives in the company, major shareholders, employees, brokers, professional traders and so on.

The news beneficial to you is:

• Broader market trends; fears of economic news, annual selloff, and slowdown, political events, crisis.

This type of news create panic, and during panic times, everyone is selling stocks. These corrections offer the greatest opportunities for you to get invested in companies with excellent fundamentals.

So, here the important lesson;

~ Buy on the correction of stock prices related to fears of economic news 

~ Buy stocks with strong fundamentals.

Keep a Reserve of Cash Just in Case

The market is crashing for few months, and it looks sexy, it is time to buy. That is great, you should get in with a long-term view about your investments, but wait, don’t pull in all your eggs.

Read the investment lesson of 1937; hold some cash, it isn’t just another story but history. The main point of this article that caught my attention is this:

“During boom times, cash often is viewed as a drag on one’s wealth, earning measly interest while stocks surge. After stocks fall, it becomes clear how valuable it is.”

Over my investing years, this dilemma is a monthly struggle while doing my personal accounting. I check every month my financial situation and how money is working for me. Too much cash during the market boom makes me think that I’m losing an opportunity of gain but during the bad time, I say to myself “likely have some cash on the side to buy some more stock”.

Too much cash during the market boom makes me think that I’m losing an opportunity of gain but during the bad time, I say to myself “likely have some cash on the side to buy some more stock”.

So, in your initial market stock investment, hold at least 30% in cash or bond which are an excellent defensive strategy to take advantage of future declines and weather bad times. You will feel more confident in holding your shares during the turmoil.

I usually start to use my reserve of cash when the stock pulls back above 10% from a recent high, with regular weekly purchase as the stock goes down. When the market turn around, going up constantly for two weeks, I stop my buy frenzy and hold the investments for at least one month.

From there, I decide if I should start to sell some shares weekly to get back to my original position of 30% cash or keep invested in the market for the bull run.

This system has been profitable over the years, taking advantage of the up and down of the market stock.

How long corrections/recessions last

Stock can go down from a minimum of 2 weeks up to 80 weeks looking at historical trends excluding the great depression.

In the above chart, we can see during the recession time the decline last longer with small correction between the years. In the last 20 years, recessions happen less often than in the previous century, indicating the FED have done an excellent job with monetary policies.

In the last 10 years, the stock market hasn’t grown match because of low inflation and low GDP, instead, in the eighties and nineties, the stock had a good run because of a booming economy.

“I believe the next recession will last long, between one to two years.”

We had an unprecedented monetary easing, this will exaggerate the next downturn.

Conclusion

These are my three golden rules to choose the right time to invest in the market stock. I didn’t talk about analyzing the companies, select high-value stocks because it will be entirely for another article.

I would love to hear your thoughts, please write them below and let’s discuss.