Do you want to start investing in the stock market? There are some concepts that you must be very clear about before you take your first steps as a beginner investor.
We made a guide to the ABC to invest in the stock market so that you lose the fear of this financial alternative that, with the passage of time, can generate huge returns.
The glossary of the beginning investor
Some key concepts you must know to get started in the stock market game:
Actions. They are, put in the simplest possible way, pieces of a company. When companies grow enough, they list their shares on the stock exchange so that anyone can buy them. They are capitalized and the buyer obtains the profits that correspond to him for the good performance of the company.
Bonuses Financial instruments that governments and companies use to capitalize. The bond issuer undertakes to return the capital to the investor along with the interest that has been generated, which may be fixed or variable.
Distribution of assets. It refers to a wide range of asset classes with characteristics in common and that behave in a uniform manner.
Mutual funds an investment alternative, made up of contributions made by individuals and companies.
Investment fund quoted. The famous ETF for its acronym in English. A hybrid between stocks and mutual funds, this type of fund is as if you had a whole portfolio of investments listed on the stock market.
Basic tips for investing in the stock market
Now, some tips to make your investment in the stock market perform at its best:
Know your goal it is essential to have specific investment objectives. Do you want to buy a house? Save for retirement? Pay for your children’s college? Each of these objectives implies a different strategy and level of risk.
Practice diversification. As in all areas of life, do not put all your eggs in a basket. Instead of buying shares of a single company, invest your money in investment funds such as ETFs or instruments such as the S & P 500, which covers the 500 best performing companies in the United States.
Leave the money there. One of the main mistakes of inexperienced investors is to withdraw their money when an economic crisis looms -which, incidentally, occurs ten years. If you resist this temptation, you will be less likely to lose your money and, on the contrary, more likely to increase your returns.
Avoid the miraculous products. There are some services and applications that promise the moon and the stars-read: high performance in a short time. They are almost always focused on the exchange of foreign currencies, which implies a high degree of risk and is not recommended for beginning investors.
Advise yourself just like when you’re learning to dive – or any activity that involves a risk – you need a little guidance and instruction before you go to the arena on your own. In this case, you need the services of a financial advisor.
Apply these tips to invest in the stock market and put your money to work for you. The sooner you start investing, the more you will see results. Finally Stock Trading Education is the best option for you.