How can I earn more? Are there any ways for me to diversify my earnings? What is the best way to invest my money for high yields? If you are one of the many who asks these questions regularly, then most probably you have heard about stock market investing. The first thing people talk about when it comes to this subject is the risk. While this may hold true, the potential return on investment more often than outweigh it.
Perhaps you know someone who has earned enough from trading that he was able to send his kid to college. Or heard about people who invested in stocks to build their retirement fund. With all the success stories published on the Internet, it’s hard not to wonder if you too could achieve financial stability through trading. If you are interested in starting your journey but you do not know where to start, you have come to the right place. At 3R Group, we are passionate about educating beginners and helping them become smart, confident investors.
How can I prepare myself?
First things first. Build your stock market vocabulary. This is a new arena for you and you need to understand the language investors speak so you do not get lost in translation. You will be encountering terminologies you will not otherwise learn if you are not an avid learner or an investor. Start by researching and familiarizing yourself with these terms:
- Earnings per share
- Price to earnings ratio
- Dividend
- Bear market
- Bull market
- Exchange
- Margin
- Option
- Yield
- IPO
- ETF
- Mutual Fund
The next steps involve looking for the best brokerage service so you will get assistance as you find your footing. Remember: You cannot show up to war empty handed. You need to arm yourself with the right information and skills to help you take those first baby steps.
You need to study the different type of stocks available in the market. Before choosing which shares to invest in, it is important that you also do extensive research on the company. It is imperative that you research multiple companies and industries. Imagine it like planting seeds in different pots that are placed in different areas of the garden and get different amounts of sunlight. When one seedling, unfortunately, wilts and dies due to overexposure to the sun, you have many other seedlings that will continue to grow. Keep a portfolio with varied stocks from different industries.
How To Pick Quality Stocks
Of course, there is a lot of homework involved in choosing which companies to invest in. Take a close look at the nature of their business, their target market, their competition, and the level of risks involved in the industry. Pro tip: pick an industry you are familiar with, then invest in an industry leader. Usually, these companies are well established and stable.
Picking the Perfect Stockbroker
After you have made up your mind about which stock you wanted to purchase, you need a stockbroker to fulfil stock trading transactions for you. For your first trade, you can opt for investments that do not require a broker to purchase such as ETFs. Otherwise, make sure to choose a brokerage service that specializes in your chosen kind of stock. Take note of the maintenance costs, commissions and other expenses that come with hiring a broker. Depending on your preferences, you can choose to transact either in-person or online or whether you can get full-service or discounted services. After you have settled with a broker, set up an account so you can start buying shares.
Which part of this process should I give great focus?
Learning the ropes of stock trading is not going to be a cakewalk. The amount of research you need to become a skilled, confident investor requires patience and dedication. You need to sift through and digest a lot of data. Without following a proper process, you may go into information overload. The good news is that there are stock trading courses to jump start your learning process in a systemic and efficient way. Proper training in stock market concepts allows you to assess, calculate and mitigate the inevitable risks.
Ready To Get Started in Stock Market Investing?
To begin your learning process, feel free to download our FREE e-Book for stock market investing beginners. When you’re ready to invest in yourself, sign up to our stock market investing course tailored fit for those who want to invest confidently, smartly and successfully.