The stock market seems like a guaranteed golden ticket to a lot of people. But it’s more than likely these people don’t quite understand how the stock market works. There are perhaps an equal amount of people who claim that stock exchange is nothing more than the home of scam artists and corporate devils. These people also probably don’t completely get it!
This is understandable. Stocks are given a strange image in the media. In films, we’ve seen stocks make people filthy rich, dirt broke or even do jail time. The fact is that stock investment can not only be safe and financially beneficial. It can also be fun! You just need to keep these things in mind.
Get the media images out of your mind
Anyone interested in finance and entrepreneurism went out to see 2013’s The Wolf of Wall Street. A lot of people who aren’t too in the know about stocks went to see it too. Though they were more interested in watching Leonardo DiCaprio get naked and high on drugs. The fraud and debauchery led people to connate that behaviour with the stock depicted in the film. But it is, of course, possible to make money from Penny Stocks without engaging in unethical behaviour. Remove the filth and criminality from your stock-based imagination, and understand that it’s not as easy as it looks!
Know as much as you can about the company
A lot of people start investing in stock left right and centre without knowing much about the company in which they’re investing. When you see plus signs and green numbers, it can be easy to think that investing in that company will get you some profit. But you need to be investing smarter than that.
Do you know what the company actually does? It sounds obvious, but many people invest without even knowing this basic information. If you want to touch the big leagues in investing, you need to know exactly what the company does. You need to know their recent financial history. You need to be able to get a projection of their financial future. Get an idea about their financial workings – production costs, employee salaries, etc. This will also give you an advantage.
You should know what products they have on the market and how well they’re doing. And the products they haven’t released yet? You should know about those too, as well as how much hype there is surrounding them.
Start with a single stock
This is going to help you keep perspective. As many a wise person has said before, the best way to learn is by doing. So your first stock investment is inevitably going to be a learning experience. This is why you should start small.
By buying a single stock, you can better follow the journey of an individual. And when you buy several stocks, you’re buying several individual stocks. That may have sounded like an obvious point to make, but it’s not one you should forget! It’s important to think of the micro and the macro when it comes to investments.