Updated: October 3, 2020
The stock market and the stock exchange are terms we often hear in the news. Young professionals and even students, often ask about how to invest in stocks for profit.
You must understand that investing and making money in the stock market is not as easy as it looks like. You can end up losing money, or you can make a fortune out of it – depending on your skills and knowledge. So it’s best that you learn about it first.
People often ask about how the stock market works and how to buy and sell shares the right way. Specifically, how to find the right stocks and buy at a low price so they can sell at a higher and profitable price.
Gain some knowledge.
Financial knowledge and experience is important if you’re planning on investing in stocks. Gain experience and a feel of the market, and keep yourself engaged consistently, even if it means putting in just a small amount at first.
I’m sure you’ve heard of people, especially in the United States, where one became a millionaire by investing only as little as $1000. This doesn’t always happen, but it does happen. And it can sometimes be just dumb luck; but sometimes it’s a result of careful study and analysis of the market.
Furthermore, these success stories have encouraged some people to seek loans as a way to fund their investment. This has received a good deal of attention in online trading, where many go online and look for a lender to get cash for the market.
In any case, here are the basic steps that you’ll need to do to invest in the stock market, if you have no experience at all.
1. Learn how it works.
First of all, you will need to understand how the stock market really works before you open an investment account. Why does it exist, and what is its purpose. To test yourself, if you can explain it to a child how the stock market works, then you’re ready. If not, then you need to learn more and go back to studying.
There are many online resources you can read, videos on YouTube that you can watch, and even seminars you can attend to understand how the stock market really works. Invest in your knowledge first.
2. Find a broker.
The second step is finding a broker to open a stock market investing or trading account. So you can have access to a trading platform. Opening an account is easy, it’s just like opening a bank account where you need to fill up some forms.
Always check if your stock broker is legitimate by asking for their license. Afterwards, you don’t have to worry as the broker will surely guide you in the tasks involved in opening and making an active stock market account.
3. Fund your account.
Many open an account, but never reach this third step because they’re afraid to lose money. But you will not be able to know unless you try and learn. It is the only way to go.
So invest or deposit money in your account. Start with just the minimum required amount by your broker. And then just transfer more money as needed, especially when you gain more experience in the stock market.
4. Develop your personal strategy.
At first, you will probably listen to what other people are buying and selling. That’s okay but don’t expect to do that for a long time. Eventually, you will need to develop your own stock market strategy.
There are many ways to invest and trade shares in the stock market to make money. Each one is best-suited to a particular personality. And it’s important that you find one that fits yours. This will be trial-and-error at first, but just be patient and learn from your mistakes, and eventually you will turn profits.
5. Be patient and persistent.
As mentioned, you might lose some money at first. That is normal and all part of your learning. Just make sure that you are properly managing your budget so your financial life won’t be affected much.
It will take some time before you get the hang of the stock market, and begin making money on a regular basis. It takes time, continuous study, practice, and a lot of patience with yourself. So whatever happens, learn in every step and don’t quit.
This article is contributed by Marcus Wiseman.