Written by Chad Echakowitz
I am 23. It’s something you need to know for the purposes of this article and there are two reasons for that. The first is that I want you to take what I say seriously. People (obviously) trust people who seem to know what they are talking about. People also stop paying attention when the person talking is young. Expertise and youth are not mutually exclusive and for this reason, you should listen to what I say and don’t switch off because I am 23. The second reason will become apparent later in the article.
People – generally – are afraid of the Stock Market. It is a scary, omnipresent thing that decides the fate of the value of things, makes a selected few rich, and even more very poor. It is believed to be a complex mathematical system understood by a few people in grey suits who have trained in Mergers and Acquisitions, Initial Public Offerings, Ring-Fences, and the acronyms which make their speedy, complicated lives quicker but no less complicated. But this is not the world we live in anymore. Thanks to the Internet and a host of companies, the Stock Market is no longer reserved for the super-rich and those who live on Wall Street. There is no reason to be scared anymore. We can all have our share (excuse the pun).
However, there is a caveat to what follows about investing on the Stock Market. This article will not make you rich. It is not a cheat code on how to be like The Guy from Limitless. This article focuses on how to get on to the Stock Market, not how to get rich on the Stock Market. The purpose of this article is to show you that it is a lot easier than you think.
For anything financial-related, research is always the first step. Google things. It is that easy. But you did not need me to tell you to go Google; you have probably done that yourself. I’m going to tell you what to Google. You cannot invest directly on any Stock Market, you usually have to invest through a third-party. That’s where most people usually stop in their pursuit of the Stock Market. They believe that because you have to go through a professional, or become a professional yourself, it’s going to be too expensive – both in time and money – and consequently, not worth the effort. Luckily, they’re wrong. It is surprisingly easy and cheap to invest through a broker. But you have to research which broker will be right for you. Simply by typing in to Google, “Trading on the Stock Market” you will be introduced to a horde of online companies who can assist you in getting on the Stock Market. They have made it as easy (and as un-scary) as possible for you to invest on the Stock Market. But do not be fooled: you are still going to have to do some work and read the literature of these online companies, compare them, and choose the one that is right for you. Don’t be afraid to send them an email if you have any questions. They understand that first-time investors are hesitant to part with their money, and the companies are usually very helpful.
Congratulations! You’re now on the Stock Market. It is that simple. But it is still important for you to do your own research in to different companies you want to invest in. Luckily for you, the research is quite easy. The London Stock Exchange, for example, has it’s own website that allows you to compare different companies, see how they have faired on the Stock Market in the past, and even allows you to run a simulated portfolio without actually risking any money. If you are not satisfied with the information given on their website, or you would like to know more about the companies you are potentially investing in, you can Google the company, either using the company name or their Stock Exchange Code. Then you can see if the CEO is worth their salt, or if there are any upcoming activities that investors should be weary about.
2. Parting with your Money
Now that you have a broker, and know the company (or companies) you want to invest in, you are going to have to part with your hard-earned cash. And this is where it becomes slightly risky: You could lose money. It happens when you’re working with the Stock Exchange. But the rewards are there too, so long as you do some decent research. The question is, how much money do you have to invest? Or better yet, how much money are you willing to risk? This question not only depends on your financial freedoms, but on your age too (see how I said it would be relevant?).
If you are trying to make a lot of money quickly, because you want some fast cash, or are looking to retire soon, it is more than likely you are going to want to go for more risky shares because they can increase in value quickly, but can also depreciate just as quickly. These are shares in small- and medium-sized business who are still in their first year of business and are looking to grow rapidly in their respected markets. They are risky, but can yield a high reward. You need to know what you’re doing. If you have money that you are okay with losing just to gain some experience, then this would probably be the best bet for you because you probably will lose some money at some point or another. Experience with the ebb and flow of the Stock Market is needed here, and if you’re willing to take the hits to gain the experience, go for it.
The safer way to invest would be in slow-yielding shares that grow over time. These are your large, well-established companies that have been around for years. You know they’re safe because it is highly unlikely that they will go out of business. These companies are good to invest in when you have a lot of time to grow your investment, and don’t need the money immediately.These shares are quite expensive to buy because the companies are well established and everyone wants a piece. It is slow, and it will seem like you’re getting tiny amounts of money back, but think of it as an interest rate banks give on an account, but with a much better return than any bank will ever offer you. They can still be risky though. No company is so solid that you are bound to make money. Do your research. Don’t part with your money without knowing what you want.
And with that, the evil monster is slayed. The citizens are free to live, laugh, and make money through investments. This isn’t a fool-proof guide, but it shows how much easier it is to invest than the general public believes. Go forth, research, and prosper. Good Luck.