How to invest in the stock market from scratch

How to invest in the stock market from scratch

This guide is intended for those who want to learn how to invest in the stock market. 

Most people only focus on the money they earn. Some choose to save, and only a few are serious about investing. These three steps are crucial for the economic future. It is possible to earn little, save a lot, invest well, and obtain an excellent result. 

There are two options to invest in the stock market: direct investment in the Stock Market, or investment through funds. Even though a direct investment is more interesting, it is preferable to invest through mutual funds for some investors.  U.S. and European stocks rallied. What about Asian futures?

Before starting to buy stocks, you have to choose the strategy to invest in the Stock Market. In fact, you can use more than one strategy. You will have to decide how much money to spend on each strategy and open a securities account. You cannot use the same account for several strategies. 

To choose the strategy, you have to have some knowledge, and you will have to spend some time learning it. 

Suppose you do not know which strategy to choose. In that case, form a portfolio of reliable and good prospects with a high yield per dividend. These companies are usually banks, utilities, highways, insurance companies, and construction companies. They are not the only ones, but many of them belong to these sectors. 


Use fundamental and technical analysis

Fundamental analysis is the one that tries to determine the value of companies based on their results and the assets (factories, brands, real estate, machinery, client portfolio, etc.) that they own.

The technical analysis only looks at quoted graphics. It does not pay any attention to the companies’ results and assets, only to the evolution of their listing on the stock market. A long-term investor should use fundamental analysis to tell what companies to buy and technical analysis to determine when to buy them.

You must follow the results that companies present each quarter. No matter how good a company is, it cannot be bought at any price. Pay close attention to present dividend yields and the prospects for that dividend to rise above inflation in the future. Most of the companies in the sectors mentioned above meet these characteristics.

If you find a better strategy that you like more, don’t hesitate to use it. However, don’t start buying stocks without knowing why you are doing it or what goals you intend to achieve with your investment. The strategy must fit the investor, not the investor to the strategy.