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The Ultimate Investing Guide for Beginners

Today, I have a very good news for you. In this ultimate investing guide for beginners, you will learn some essentials elements that will allow you to operate with confidence in the stock market.

Do you want to invest but are you feeling intimidated by the stock market?don’t worry, you are not the only one with doubts. Almost two years ago, when I started, I didn’t know where to start. Also, not understanding the vocabulary used in the articles I tried to learn from, made the process even more challenging. But rest assured since that moment, I continued to learn and today, I have a great knowledge of the stock market.

For more details about my journey please check the link below: https://willing2bewealthy.com/about/

The stock market can look intimidating especially for beginners, but in this essential investments guide, you will learn the essentials to start investing successfully.

What you will learn after reading The Ultimate investing guide for beginners?

Take away to get started such as:

1. Why you should start investing

2. Understanding how to invest in the stock market

3. Exchanges

4. What a share is

5. what a bond is

6. What a portfolio is

7. What mutual funds are

8. ETFs

9. Trading

10. When to start investing

1. Why you should start investing?

Investing in the stock market is often considered one of the best ways to grow your money over the long-term.

Stock market is a platform is that help to build wealth because every Euro (or dollars) you invest will work to earn more money for you. Doing this way, you will start to build wealth. but when you save money in the bank account the only thing you earn is safety.

So, is it bad to have a savings account?

It’s okay to have a savings account. Is one of the ways to create wealth but it’s necessary to know the European and American banks do not offer competitive interest rates. That’s why you should take the inflation in consideration . For example if your bank give you a return of 1% on your savings account in the long-term but the inflation in you country is 2% you should consider keeping some of your money in your portfolio.

Because money you put in the bank today is worth just a little less tomorrow. For further information about inflation, please, check the link below: https://willing2bewealthy.com/2019/09/06/4-ways-to-start-creating-wealth-for-students/

Tip: Over the long term investing allows your assets to grow over and above the rate of inflation

2. Understand how the stock market works

The stock market works likes any marketplace. The difference from here is you will not buy jeans or shoes (liabilities) but here, the product being bought and sold are pieces of ownership in companies (Assets). The slim ownership you will get from this company they call it shares of stocks or by a fancy technical name of securities.

Now you start to understand, let continue with another word you will hear many times.

3. Exchanges

To make it simple, keep in mind that exchanges are like market. it gives buyers and sellers the opportunity to meet.

They are many exchanges in the world. Here in Europe the TOP 5 biggest by the market capitalization are:

1. Euronext

2. London Stock Exchange

3. Deutsche Boerse

4. Nordic Exchange ( Also know as Nasdaq OMS)

5. Six Swiss Exchange

In Romania, The Bucharest Stock Exchange is the biggest, followed by Sibiu Stock Exchange.

If you want to learn more about Exchanges, we recommend you this article: All of the world’s stock Exchanges by size: http://money.visualcapitalist.com/all-of-the-worlds-stock-exchanges-by-size/

The best is yet to come, continues reading: The ultimate investing guide for beginners

4. What is a share?

A share is simply a divided-up of the value of a corporate. companies issue shares in order to have the necessary means to finance projects and to grow their business. From the moment you will buy a share you’ll become a owner of a slim part of the company. you will get a technical title of a share holder. sound fancy right?

How you will start getting money from your shares?

They are two ways you can start having benefits of your investments:

1. By dividend: You will receive a sum of money in accordance with your shares when the company makes profits.

2. You will have the right to sell your shares when you want

Depending on amount of money you have invested. you can have the rights to voting during the general set of shareholders.

DISCLAIMER: My blog offers information about investing and saving, but not personal advice. If you’re not sure which investments are right for you, please request advice, for example from financial advisors. If you decide to invest, keep in mind that investments can go up or down in value, Therefore you could get back less than you put in.

5. What is bond?

Bonds are commonly referred to as a fixed income securities and are one of the three assets classes individual investors are usually familiar with, along with stocks and cash equivalents.

When companies need to raise money to finance new projects, maintain ongoing operations, or refinance existing debts, they may issue bonds directly to investors.

When you buy a bond, you are lending a company or government money. In return you receive interest and the issuer (government or companies) promises to pay back the loan on a specified date.

As bonds are classified as fixed-income; it’s safe to say no matter how much you have invested or what your age, fixed-income can play an important role in every portfolio.

Fixed-income is an investments that seeks to provide a return in the form of fixed periodic payments and the eventual return of principal at maturity.

Tip: – Bond provide investments income with the potential for capital gains if you bought at a discount
– On the downside, your bond investments could lose value if the underlying company goes bankrupt or interest rates rise.

6. What is a portfolio?

A portfolio is a collection of all your investment held by a broker or investments provider. You may own some individual stocks, bonds or ETFs, will call all of it portfolio.

Tip: Remember to diversify your portfolio. this strategy will allow you to reduce risk of being exposure in one industry.

Please, check the link below if you want to learn more about diversification: https://www.investopedia.com/investing/importance-diversification/

7. What is a mutual funds

A mutual fund is simply another way to buy shares, but instead of you buying a slice of a company directly, you give your money to a specialist manager who pools it with other investors money and they take responsibility to buy a lot of shares in the stocks market.

Tip: A mutual funds is a good place to start investing. but remember to only purchase shares of well-established investments funds.

8. ETFs (Exchange traded funds)

Slice ETFs are funds traded on the stock exchange. Most of them aim to track the performance of a particular index of stocks, bonds or other assets. Often, they have low management costs.

Tip: The range of exchange traded products is huge, please make sure you know the features and risks of any fund before you invest. Unlike mutual fund, ETF shares are bought and sold at market price, which maybe higher or lower than their NAV, and are not individually redeemed from the fund.

9. Trading

Trading is the activity of buying or selling stocks. Trading involves more frequent transactions, such as buying and selling tocks, commodities and other instruments. Generally speaking trading occurs when an investor makes an order to a broker, the broker executes the order through the ordinary means. When you buy or sell stocks over the internet it’s called Online trading.

Tip: Keep in mind trading is an advanced tool for experts. As, a beginner, it’s safe to avoid trading when you get started.

10. When to start investing?

The perfect time is today. Make a plan on how and what you will invest in. The perfect start is to deepen first your knowledge of the stock market.

Tip: – Invest first on stock market knowledge.
– Thanks to Virtual stock exchange technology, you can start with a simulator ( stock market games) that let you pick stocks, make trade and track results…. all without risking your money.

To anyone interested in this game, find Simulator ( Stock market) in the link below. https://www.investopedia.com/simulator/

I hope this ultimate investing guide for beginners will encourage you to learn even more about the stock market. In the meantime, keep getting better and grow wealthy.
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4 Responses to “The Ultimate Investing Guide for Beginners

  • ericthomas987
    1 month ago

    The magic of investing lie in the power of compounding. The earlier your start investing the better. I liked reading this article.

    • I agree with you, Eric. Almost everyone as an investor knows the power of capitalization, but only few have the self-discipline to apply it as a strategy. Many people do not give as much time as possible to their stock market investments to grow.

  • Izabella Helen
    2 weeks ago

    Great content

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