When you face the stock market for the first time there are a series of preconceptions that it is important to avoid. So that you can be successful in investing your money without losing it. And that you think that the stock market is for those who are lucky. Have money, and are full of speculators, who the latter is not false nor does it have to be bad. Precisely the stock market, investing intelligently, is one of the ways to multiply your savings in the long term. I have talked about multiplying your savings in the long term. Not about getting rich in less than a year by investing 1000 euros a month.
How to play on the bag
This is one of the preconceptions in society about the stock market: that it is a game. And surely if you are just starting out and you have commented that you want to invest more than one person, you will have been branded as crazy for wanting to lose your money playing on the stock market. The bag is not a game. This is not the place to bet on a stock going up or down or to invest on the advice of well-marketed people who promise low-risk returns. We recommend that you do not use the bag as a casino. Where you win a lot or lose everything and that you be very careful with the advice of others. If you still like the adrenaline of betting on the stock market as in a casino or in sports betting. Do not use more than 10% of what you had planned to use in investment.
Invest in the stock market for the long term
The way to play on the stock market and make money is by investing for the long term. Not everyone has the stamina to wait years for your savings to multiply. But it will be the only way that you do not lose an important part of your money. Of course, the long term is no guarantee of success but if you invest in the best funds and stocks for the long term it is difficult to lose money. Here you can see what we consider to be the best investment funds this year.
In addition to the patience, you will need. It is important to know how to endure the ups and downs and periods of irrationality that occur in the stock market. When the crisis and panic arrive, the stock market plummets without distinguishing between the companies. That deserves to go down and those that do not. If you trust your stocks or investment funds it is time to hold out or expand. But if you are playing on the stock market or investing according to what they tell you and without conviction. You will want to get everything out before losing more.
If you want to invest on your own: Learn to account
If you want to invest on your own, you will need accounting knowledge to know how to value companies. The problem is that you will need many hours not only to learn to value companies well but also to monitor your investments. For a beginning investor, we do not recommend that you start investing without having the necessary knowledge. It is better that your money is handled by professionals in the sector with years of experience and low commissions. At Capital, we help you invest in the best investment funds with low commissions and without leaving your bank. We charge € 2 for every € 1000 invested up to a maximum of € 20 with a capital of € 10,000, above € 10,000 we continue to charge € 20 per month. You only pay if you win, that is, if a month the profitability is negative, we do not charge.
Once you learn to account, you can diversify between the funds that you have already bought. And the stocks that you are valuing but our recommendation is that before that you forget to buy on your own.
Read investment books
Continuing with the previous point, whether you want to know about accounting or the investment world. Read books to know the history of the stock market and learn about it. To expand knowledge on how to choose a good investment fund. And above all to have a culture of financial and that you cannot be fooled by your bank or anyone with good marketing.
You will avoid falling into the bubbles where at the beginning anyone swells to win money and when they click, big losses come. Invest in stocks or fashionable funds that when they go from being in all the newspapers the great returns disappear; You will not believe those who are photographed with big cars because they have won everything effortlessly in the stock market. But they are still there to sell you the course, among many other cases that you can learn in the books you read.
Learn from the mistakes of others
With training and reading books, take note of every mistake other investors have made to avoid them. In the end, it is inevitable to have to go through any of them to realize the account, but as far as you can try to avoid them. It doesn’t matter that others are getting rich faster than you. Don’t make mistakes for it.
Diversify
Whether you invest in mutual funds or stocks, always diversify. If you invest in stocks, do not do so in the same sector or country. Today it is easy to invest in various parts of the world. Buy defensive sectors for times of crisis and avoid cyclical sectors.
Although you like more to invest on your own in stocks. Invest in funds also because there will always be a failure that you do not detect and that you can cover by being diversified with investment funds. That is why at Micappital, depending on your risk profile, we diversify among various funds to mitigate errors.
Delegate to others who have more knowledge and a professional career
We have highlighted it in several points, but it seems to us the most important advice for a beginner. There are many bankers, traders, brokers, among others, hunting for your money and who are not interested in making you win. But charging you commissions and courses with which you will continue to lose money.
Spend your time researching the fund managers, their profitability in the last 5 years. The commissions they charge, penalties for withdrawing your money before a year, etc. With a good selection of work, you will be able to sleep peacefully at night. And better carry the hard moments of falls in the bag.
By following these tips you will know how to invest in the stock market for beginners.
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