I think we live in very exciting times despite the countless obstacles and hurdles that present themselves.
One particularly exciting area is the stock market and how it completely changed with recent years.
When I say - change, I mean the perspective of it from the younger generations. I believe the whole phenomenon started with the bum of life coaches and all sort of finance, independence, and stability books that basically made us evermore hungry for wealth and the idea that we must live now before we are too old.
The result- more younger people are discovering the benefits of investing in stocks and learning about the stock market.
There is a question that is circulating among a few on the matter of which is better: saving your money in a bank account with the minimum interest fees banks are offering or investing them in stocks and seeing results in a months time, which would usually take your bank saving account years to accumulate.
I only wished we learned this earlier in High school as it is such a life changer and can turn our lives around.
There really should be a class called: Smart Investing and Saving!
Unfortunately, this knowledge is only available to a few, a few that are interested or are specialising their degree around finance.
I personally heard of the potential benefits of investing from my partner and in no time found the results.
And as a complete beginner that is still earning and walking through my first baby steps in investing I will do my very best to show you through my eyes one of the basics of it all.
What is a stock? And what happens when you buy stocks?
The stock of a corporation is all of the shares into which ownership of the corporation is divided. In American English, the shares are collectively known as 'stock'. A single share of the stock represents fractional ownership of the corporation in proportion to the total number of shares.
Companies sell shares in their business to raise money. They then use that money for various initiatives: to fund new products, invest in growth, expand their operations or to pay off debt.
Investing in shares means buying and keeping them for a while in order to make money. If the company grows and becomes more valuable, the share is worth more - so your investment is worth more too. Some shares pay you part of the company's profits each year, called a dividend.
In summary, when you buy a stock, you're buying a fraction of a company, and that fraction may pay dividends and gain you voting rights ( only when you buy a significant amount of the company's shares)The patient investor will be rewarded, as the money is made by investing in good companies and holding on to them for a long period of time.
With all that said, you also need to know that some dividends only pay a few pennies depending on the amount you have invested. And the same goes for your profit from an investment. It all depends and varies considered the amount you have invested.
Suitable Platform
Next step after you have covered your research ( You can go as deeper as you would like as I have chosen only to cover a brief basic of the matter in this article- I will include helpful reading at the end of my post)
is to find a suitable platform that you are going to use for trading. I am currently using 212 TRADING INVEST as I find it easy and user friendly even for beginners like myself. A huge benefit to the platform is their TRAINER MODE OPTION. Meaning that you can log in the app and you have a virtual amount of money ( all fake for the sake of training) to practise on and use for investments in companies.
Research/choose the companies
When you log into any of your chosen platforms ( I will talk about 212 Trading here as it is the only one I have used so far) you will automatically see a list with companies. When you click on any of them it gives you a brief description of what they do, who runs the company, how many employees they have, their revenue and how much dividend they will pay. You will also see their financial history and full income statement in a very user-friendly format.
Of course, you will be able to also track how their stocks are doing - if they are currently going up or down, and the same information back in tie to 1+ years, so you can make a good decision on whether or not this company is worth your investment and if there is a potential.
It is also important to acknowledge that more or less this an' I have a hunch thing' based on the provided info. Sometimes companies you never heard of before and are not doing really well can become extremely popular and their stock can jump super high, depending on the circumstances.
So really do your research and consider the news around you.
What is happening around the world at the minute?
Which companies are more spoken of?
What is trending?
Technology that has the potential to boom in the feature?
Clean energy?
Healthy food?
And many more.... factors you can possibly think of.
It is a community
You can also join a forum or Twitter where there is a community that discusses stocks on a daily basis. This is a good way to get insights on different stocks and movements or trends or foresee events that are to come.
Make a list
Make a list of companies you think will perform well in the long run and gather as much information about them as you can. Then find if they actually have stocks and google the abbreviation of the company's name in the stock market. For example, Apple is under AAPL.
Price Alert & Watchlist
If you are not ready still and would like to monitor some of the companies you have chosen without buying stocks, you can simply add them to your watchlist on 212 Trading and set price alerts to keep track of them.
Look for cheaper stocks
As a beginner, you do not want to spend all of your money on something you do not quite yet understand. So while you are learning to start small and look for stocks that are cheaper. For example, to buy one share form Apple at the minute it costs £99.87 and this is only for one. This changes all the time and this price is taken from its current position on the stock market.
One stock from let's say Healthier Choices Management is £0.0016 which gives you, of course, the option to buy more shares from this company for less. And if for whatever reason this company's stocks hit and go up you can earn a lot of money! With Apple as you already guessed it is a bit different, their stocks grow all the time steadily and this means the price to buy one is higher too.
It all depends on how the company is doing at the moment.
Ideally, the best time to buy your stocks is when they are at their lowest so you can buy more shares for less money but in the same time, you want the company to have a potential to grow and so you can make a profit.
It is all very relative because it depends on the current positions and circumstances of the market.
For example, I have bought 8,000.00+ shares from Healthier Choices Management ( HCMC) for only £10 and if the company does really well this has the potential to bring me more than £10,000 in profit.
Calculate your profit
Which brings me to the next important thing. Calculate how much you want to invest ( and you can do this every month) and then calculate how much your POTENTIAL profit could be.
Fast or slow
There are at least two ways you can earn money trading. The first is to leave your investment and let it earn you dividends that grow every year and watch your money grow as the company grows. I call this slow trading ( I came up with this term, it is not an official terminology)
The there way is as you guessed fast trading. What does this mean?
Naturally, a stock will have its up and down movements ( even when in general the stock is going on an up direction) and when it is down it will show on your balance as minus and you will be on a loss when it goes up it shows as a plus and you are profiting. So what some people choose to do ( and for this you need to be on it from the time it opens till it closes) is to cash out their investment when they are on a plus- profiting and store the profit in their account, then buy it again when the stock of that company is down - on a minus which means buy it cheaper.
And some companies stock history and movements makes them perfect for this. A spiky up and down movement as shown in the photo below.
