INVESTMENT IN EQUITIES : A GUIDE FOR BEGINNERS INVESTORS .

HOW TO INVEST IN EQUITY


Barnard Baruch, known as "The Wall Wolves Ron Wolf", has owned his place on the New York Stock Exchange by the age of 30 and has become one of the country's best known financial houses until 1910.

Mr. Baruch had no fantasies about the difficulty of a successful stock investment, saying that the main purpose of the stock market is to make a man as stupid as possible, even though he is a profession.


According to Ken Little, author of 15 books on investment and personal finance, "If you are an individual investor in the stock market, you need to know that the system works for you."


At the same time, hundreds of thousands of people regularly buying and selling corporate securities on regulated stock exchanges or the NASDAQ are literally succeeding.

The profitable outcome is not the result of good luck but the application of some simple principles derived from the experience of millions of investors across numerous stock market cycles.


Intelligence is an asset in any effort, but good IQ is not a prerequisite for investment success.
From 1977 to 1990, Magellan's renowned portfolio investor, Peter Lynch, claimed that everyone had the brains to follow the stock market:
"If you can do it through fifth grade math, you can do it."


TIPS FOR INVESTING IN EQUITIES


Everyone is looking for a quick and easy way to wealth and happiness. Suddenly it seems to be human nature to constantly search for hidden keys or some difficult knowledge that leads to the end of the rainbow or the winning lottery ticket.


It's extremely unlikely that some people buy a winning stake or common stock that rises more than four times a year, but relying on luck is an investment strategy that only foolish or desperate people choose to follow.

In our pursuit of success, we often overlook the magic of combining time and interest, the most powerful tool we have available.

Investing on a regular basis, avoiding unnecessary financial risks, and getting your money to work for you for years to decades is a sure way to accumulate important assets.

Here are some tips that early investors should follow.



INVESTMENT  IN EQUITIES : A GUIDE FOR BEGINNERS INVESTORS .
INVESTMENT  IN EQUITIES : A GUIDE FOR BEGINNERS INVESTORS .



1. HOW TO INVEST IN THE EQUITY FUND: SETTING LONG-TERM GOALS



Why are you considering stock investment ?


Do you need cash for 6 months, 1 year, 5 years or more? Are you saving for old age, for future college expenses, to purchase a home, or to build a real estate to be held by a beneficiary ?

Before investing, you need to know your purpose and the possible times in the future that you may need funds. If you need to get your money back in a few years, consider other investments.

Stock market volatility does not give you the confidence that you can use it when you need all the capital.

Once you know how much capital you will need and when you need it, you can calculate how much investment you will need and what return on investment you will need to achieve the desired results.


Use one of the free financial calculators available on the Internet to estimate retirement or how much future college expenses will be needed.

A variety of retirement calculators, from simplicity to more complex ones including integration with future social security benefits, are available in Kiplinger, Bank rate and MSN Money.

Similar college cost calculators are available in CNNMoney and TimeValue. Many securities brokers offer similar calculators.

The growth of a portfolio depends on three interdependent factors.

  1. The capital you invest in
  2. Amount of annual net income for your capital
  3. Investment year or period
Ideally, you should start saving as soon as possible, save as much as possible, and earn as much money as possible consistent with your risk philosophy.


2. HOW TO INVEST IN THE CORE STOCK: UNDERSTANDING THE INVESTMENT RISK TOLERANCE (RISK TOLERANCE)


Investment risk sensitivity is a psychological trait that is genetically based, but positively influenced by education, income, and wealth (with a slight increase in risk tolerance as they increase), negative by age (as people age , Risk tolerance is reduced).


Your risk tolerance is the degree of anxiety you feel when you are at risk and how you feel about the risk.

In psychological terms, risk tolerance is defined as "the extent to which a person chooses the risk of experiencing less favourable outcomes in order to pursue more favourable outcomes."
In other words, would you spend $ 100 to get $ 1,000? To get a thousand dollars? All humans are varied in risk tolerance, and there is no "right" balance.

Risk tolerance is also affected by human perception of risk.

For example, taking a plane or a car would have been perceived as very dangerous in the early 1900s, but today it is less dangerous because flying and car travel are common.

On the contrary, most people today feel that riding a horse is a dangerous risk of falling or buckling because there are few people around the horse.

In particular, the idea of ​​awareness in investment is important.

For example, the more you have knowledge about how to buy and sell stocks, how much volatility (price fluctuations) exist, and the difficulty or ease of clearing investment, the less risk you have before your first purchase There is.

As a result, the risk awareness has evolved, so there is less anxiety in the investment, even if there is no change in the risk tolerance.

By understanding the risk tolerance, you can avoid investments that are likely to disturb you.
Generally speaking, you should never possess assets that will never let you sleep at night.

Anxiety stimulates fear that causes an emotional response to a stressed person.

Investors who are able to maintain a calm attitude during the financially uncertain period and follow the analytical decision-making process are always ahead.


3. HOW TO INVEST IN EQUITY FUND: ADJUST YOUR EMOTIONS.


One of the biggest obstacles to stock market gains is the inability to deter emotions and make logical decisions.

In the short term, corporate prices reflect the complex sentiment of the entire investment community.
When the majority of investors are worried about a company, its share price is likely to fall;
When many think positively about the future of the company, its stock price tends to rise.

A person who feels negative about the market is called a bear, while a positive partner is called a bear.

The constant fighting of bulls and bears for a long time is reflected in ever-changing securities.
These short-term movements are driven by rumours, speculation, and hope (emotions) rather than systematic analysis and logic of the company's assets, management and prospects.

Moving stocks against our expectations creates tension and anxiety. Do you have to sell your position and avoid damage? Do I have to keep stocks in hopes of price rises? Should I buy more ?

When stocks perform as expected, the following question arises: Do I have to make a profit now before the price goes down? Do I have to keep my position because the price is going to be higher? These thoughts will fill your heart.

In particular, if you constantly watch the price of security, you will eventually come to the point where you will take action. Because emotions are the main driving force of your actions, it's probably wrong.

There must be a good reason to buy stocks, and if that is the case, there should be expectation of what the price will be.

In addition, you must establish a point at which you can liquidate your holdings, especially if your reasons are proven to be invalid or if there is no response from the stock as you expected.

In other words, before purchasing security, you have to have an exit strategy and run that strategy helplessly.


4. HOW TO INVEST IN CORE STOCK: HOW TO DEAL WITH BASIC MATTERS.


Before taking your first investment, take some time to learn the basics of the stock market and the basics of individual securities that make up the market. There is an old saying.

Stock market, not stock market. Unless you buy ETFs, you will focus on individual securities overall rather than the entire market.

Not all stocks move in the same direction. Even if the average falls below 100 points, some companies' securities will go up in price.

Here are the areas you need to know before you make your first purchase:

  • Financial Indicators and Definitions . Understand the definition of metrics such as P / E ratios, EPS (earnings per share), ROE (return on capital), and compound annual growth rate (CAGR). It is important to know how to calculate and have the ability to use these metrics to compare different companies.                                                                                                              
  • Popular stock picking and timing methods . You need to understand how "fundamental" and "technical" analytics are done, how they are different, and where each is best suited to the stock market strategy.                                                                                                                                    
  • Stock market order type . Identify market orders, limit orders, market order stop, stop limit orders, delayed stop loss orders, and other types of commonly used investors.                                       
  • Other types of investment accounts . Cash accounts are most common, but margin accounts are required according to the rules for certain types of transactions. You need to understand how margins are calculated and the difference between initial margin requirements and maintenance margin requirements.

  

5. HOW TO INVEST IN STOCKS: DIVERSIFICATION OF INVESTMENT


Experienced investors such as Buffett avoids stock diversification with confidence that they have done all the necessary research to identify and quantify risk.

It is also comfortable that you can identify the potential risks that could jeopardiSe your position, and you can liquidate your investment before you can make significant losses.

Andrew Carnegie is said to have said, "The safest investment strategy is to put all the eggs in one basket and see the basket."

Nevertheless, do not make the mistake of thinking that you are Buffett or Carnegie, especially during the first year of your investment.

A popular way to manage risk is to diversify exposure.
Blatant investors often own shares in other companies in other industries in other countries, with the expectation that a single negative will affect all holdings or otherwise affect them.


Imagine you own shares in five different companies. Each expects to continue to generate profits. Unfortunately, things change.

At the end of the year, the two companies (A & B) are performing well, which can increase their stock by 25% each. The share prices of the other two companies in other industries (C & D) rose by 10% each, and the fifth company 's (E) assets were liquidated and paid for large - scale lawsuits.


Through diversification, you can recover from total investment losses (20% of your portfolio) by gaining 10% from two excellent companies (25% x 40%) and 4% from the remaining two companies (10% x 40% There is Despite a 6% decline in total portfolio value (14% up from 20% loss), it is much better than investing only in E.


6. HOW TO INVEST IN CORE STOCKS: DO NOT INVEST IN LEVERAGE


Leverage simply means borrowing money to run a stock market strategy.
In a margin account, banks and brokers can usually lend money to buy stocks that are 50% of the value of their purchases.

In other words, if you want to buy 100 stocks for 100 dollars for a total of 10,000 dollars, you can borrow 5,000 dollars from securities companies and finish the buyout.

Using borrowed money exaggerates the result of "river" or price movements.
Suppose that the stock moves to $ 200 a week and you sell it. If you use it exclusively, your return on investment will be 100%.

[20,000 to 10 thousand dollars / 10,000 dollars]. If you borrowed $ 5,000 to buy a stock and sold for $ 200 a share, the return would be 300% [($ 25,000 / $ 5,000), excluding the interest expense paid to the broker for $ 5,000.

It would be nice if stock prices were going up, but consider the other side. Assuming that the stock has fallen to $ 50 per share instead of doubling to $ 200, your loss will be 100% of your initial investment, plus the interest cost of the broker [$ 5,000 - $ / $ 5,000].


Leverage is a tool that is neither good nor bad. However, it is the best-used tool after you have gained experience and confidence in your decision-making skills. Limit risk at startup to ensure long-term profitability.


LAST TIPS FOR BEGINNERS TO START INVESTING IN STOCKS.


Equity investment has historically proved easy liquidity, total visibility and active regulation to ensure fair competition for everyone while enjoying a much higher return than other types of investments.


Investing in the stock market is a great opportunity to build value for people who want to be a coherent saviour, gain experience, manage risk properly, be patient, and let the magic of harmony work on them .


The younger the investment exploration, the greater the end result. Do not forget to walk before you start running.



OPPORTUNITY    TO   WIN   25   $  .  


  >>>>>>>>>>>>.. CLICK  HERE 




thanks for the time .

Post a Comment

0 Comments