Stock Market Investing for 5th Graders Who Want to Make Millions
For many, the stock market sounds like something that’s only for the rich people. Worse, it's also portrayed as a means of getting filthy rich very quickly and getting in trouble just as fast. In truth, the stock market is just one form of financial investment that anyone can get into, which includes, bonds, mutual funds, insurance, Bitcoins, etc. It is a form of investment that anyone can learn and do.
Stock Market Investing for Beginners
You don’t need to be a math wizard or have a lot of money to get started. Here are the basics that you need to know so you can start investing in the stock market.
Basic Dos and Don’ts of Stock Market Investing
- Stick to the sound and solid companies. Invest in companies that have long track records of slow and steady growth. These are commonly called blue chip companies. Startups and skyrocketing growth companies are considered high risks that should be avoided.
- Do not become a Day Trader. This is what people see in movies, where people buy and sell stocks within a matter of hours speculating on its price rising or falling and hoping to make a profit based on this speculation. Some people make this as their career because they have the knowledge and experience for this.
- Invest in stocks for the long haul. This means that you must be willing to let your investment sit for a long time, at least several months or even better, for several years.
- Slowly build your investment. It is better to invest in small amounts monthly and build your portfolio slowly. Even if you already have a big chunk of funds available, it is best to cut this up into smaller chunks and spread investing it for several months. This is an advantage because you can make changes to your monthly investing based on the changes in the market.
- Diversify your investments but not too much. You will probably start with one company but slowly invest in others and diversify in terms of the basic industries. An ideal portfolio is to have 1 or 2 companies in banking, real estate, construction, mining, and manufacturing. Do not overdo it though. Start to build your investment in 1 or 2 companies first before investing in others.
- Do not panic when your stocks go down. If you have invested in a blue chip company, chances are this is just part of its cycle of ups and downs. Unless something major is happening to the company, this should be ok. In fact, the best time to buy stocks of a company is when its value is going down. Because you are a long-term investor, the price will eventually go up and the lower you bought a stock the higher the returns when it does go up.
As you can see, the stock market is very easy to understand, even a 5th grader can learn it. As a beginner, the do’s and don’ts mentioned above will serve as your guide in the stock market. However, in this situation that you are considering to invest in the stock market, you may want to consider having an accessible account for all of your international money remittances anytime, anywhere in the world.