John Addison, a gifted and successful businessman, once said “You can make money or you can make excuses”. And when you look at the stock markets, it feels like everyone else is making money except you. Well, guess what? The door to that club is still wide open and this guide will take away your lack of knowledge as an excuse and help you learn how to invest in stock market for beginners.
So let’s ditch the intimidation and dive straight into the world of investing to make some real money – it’s way simpler than you think.
First Things First: What is a Stock Market & How Does It Work?
Consider a market where you go every month to buy your groceries & stuff – only this time, imagine it has “pieces” of companies (called stocks or shares) that are being bought and sold instead of the usual fruits & veggies.
That’s the stock market in a nutshell.
When you buy stock in a company like, say Apple, you essentially become a tiny part-owner. As Apple sells more iPhones and iPads, the company’s value (hopefully) goes up and so does the value of your piece of the pie.
But here’s the trick behind it all: just like in any other marketplace, stock prices can go both up and down as well (we’ll teach you how to leverage this trick in our courses).
When you sell a stock at a higher price than when you’d bought it, you make profits and when you sell it at a lower price, you lose money.
Stock Market Volatility: What Beginners Need to Know
And here comes the real talk about a concept that makes stock market investing a rollercoaster for beginners – market volatility. For some company shares, prices can go up and down a lot, sometimes even dramatically due to any reason (the best example is a sudden dip in oil prices in COVID-19 era, remember?).
This uncertainty and pricing fluctuations are called volatility. It’s perfectly normal, it’s expected and frankly, it’s where you’ll get the most opportunities to earn a lot of money. If you catch a share price at a low, you’ll be able to sell it at a high later if it goes up.
ZBut to know what and when to buy only comes with practice, with knowledge, with experience.
Imagine you wanna learn how to surf on a perfectly calm, flat sea – would be boring and fruitless, right? You need those waves to catch a ride. A smooth sea makes not a skilled sailor – you need rough, raging waters for that purpose.
The same goes for the stock market.
Volatility creates opportunities. And if you have a solid foundational understanding of stock market investments and a long-term strategy, nothing could stop you from making millions.
That’s why our Smart Investing Starter Course will teach you how to ride those waves, not get wiped out by them when the market dips. Think of it as your surfboard and your life vest, keeping yon top of the waves and staying alfoat.
Investing In The Stock Market: How to Buy Stocks for Beginners
Forget about Leonardo Di Caprio’s Wolf of Wall Street cause guys in suits don’t yell on a trading floor over the stocks anywhere anymore – those times are gone.
Instead, you buy and sell stocks through a brokerage account if you wanna invest in the stock market. It’s an online platform that connects you to the market. Think of it like Amazon for stocks. You browse, you click, you buy. Simple as that.
Now let’s learn how to start investing in stocks as a beginner:
1. Open a Brokerage Account
Opening a brokerage account is pretty easy. Choose a reputable online broker (there are tons of options but we usually recommend Fidelity or Schwab), provide some basic information and add funds to your account.
And bam! You’re ready to roll.
2. Choose the Right Investing Style
Just like there’s no single “right” way to raise kids or cook a killer pasta, there’s no one-size-fits-all approach of stock market investing and we won’t tell you there is one, either. It all depends on your personal choice and strategy.
How would you want to get your hands dirty? Would you want to invest all your capital in just one stock or diversify and get a basket of stocks? Buy stocks from individual companies or ETFs? Are you in it for the long haul or want some quicker gains (which, by the way, come with higher risks)?
Hence, it’s crucial that you first figure out your investing style while learning how to invest in the stock market as a beginner.
We’ll cover more about this in Module 5 of our Smart Investing Bootcamp to help you define your own style and strategy – because generic advice would be about as useful to you as windshield wipers on a submarine.
3. Choose The Best Stocks
Now this is where you choose a company and buy a stock. Time the market and research companies you think might do good in the future. Look at their financial reports and think about how their future could pan out. History tells us that stocks usually return an annual average of 10%. However, as it says, it’s the “average” and you wouldn’t want to be on the losing side.
So don’t just throw darts at a stock ticker (a ticker is a name assigned to a stock in exchange) and choose stocks at random. There are also tons of free resources available online on how to choose the best ones (and we also cover this extensively in our courses).
That brings us to our next question: how much money should you be investing right off the bat?
How Much Money Should You Invest In Stock Market As A Beginner?
How much to invest in the stock market – this is the million-dollar question (pun intended here). The truth is, you can start small – even $50 or $100 will do. You don’t need a fortune.
In some broker accounts, you can even buy fractional shares, which means you can own a piece of Amazon or Tesla’s share even if you can’t afford a full share. We won’t recommend that you start with pumping in tens of thousands because that’ll always be risky. So choose an amount you’re actually comfortable with.
We don’t recommend bigger amounts initially because we want you to first learn and understand the way stock prices work. We don’t say you won’t lose money, you abso-frigging-lutely will. But will time & experience and the knowledge from our Smart Investing Starter Course, you will learn to overcome those losses and consistently get rewarded.
Remember, every journey starts with a single step – or in this case, a single share. That’s the most important part so first learn how to invest in the stock market as a beginner with us and don’t let the fear of not having “enough” stop you from taking that step.
Conclusion
So, there you have it – a guide on how to invest in stock market for beginners. No more excuses. No more feeling like you’re someone on the outside who wants in. Just know that it takes time to build wealth. And doing it via stock market investments is not a sprint, it’s a marathon.
There will be ups and downs – there’s no escaping them. Sometimes you’ll lose and sometimes you’ll win. But remember why you started. Remember your financial goals – that dream vacation, early retirement or simply the financial security. And guess what, we have designed our Smart Investing Starter Course and Smart Investing Bootcamp to give you the very same knowledge and skills that made our investments successful and helped us achieve our financial goals.
So sign up for our course and secure your finances today. We want you to be among the 10% of the traders who win. So invest in your future. Invest in yourself. You deserve it.
