Stocks are a popular investment. But the question that many people have is how invest in shares?
To help you understand more about how invest in shares, we prepared today's article on the subject. Want to know more? So follow along now!
Tips for starting to invest in stocks
Learn how to invest in the stock market
Maybe in the short term you won't notice the difference due to beginner's luck, but in the long term we can guarantee that there will be a huge difference.
Furthermore, mistakes on the stock market can be very costly, as your capital can disappear almost overnight if you are not careful and don't know what you are doing.
There are a multitude of ways to learn, but one of our favorites is to learn from people who have already invested in the stock market and succeeded. For this, the best thing is to read his books.
Avoid binary options
Binary options are financial products that allow you to bet on the rise or fall of a specific underlying asset. The main characteristic of binary options is that you either win or lose everything.
It is a financial product that has some complexity and, in addition, carries a very high risk, so you need to be very careful and know what you are doing.
This is why you need to stay away from binary options, especially when you are starting to trade on the stock market.
Don't invest money you can't afford to lose in the stock market.
This advice is classic and you've probably heard it before.
Although in the long term the stock market always goes up, in the short term you can lose a lot of money, either because the different instruments at our disposal are not well controlled or because we do not choose the shares in which we invest well.
That's why you don't need to put all your capital on the stock market. First, we need to build up a certain amount of assets and when we have saved a sufficient amount to deal with possible eventualities, we can allocate the rest to invest in the stock market.
You have to be prepared to lose
This is a slightly different point from the previous one. Pareto's law applied to the stock exchange implies that 80% of profits on the stock exchange come from 20% of shares. Of the remaining 80% shares, some will generate small profits and others will generate losses.
In other words, it's statistically normal that we don't make money on every stock we invest in. With some we will make a lot of money, with the majority we will not obtain losses or profits and with a few others we will have losses.
What matters is that, as a whole, our portfolio grows over time and that is why nothing happens if we lose money with a particular position.
The objective is, on the one hand, to win more often than we lose. On the other hand, we must make our gains greater than our losses.
If we achieve these two objectives, our assets will grow sustainably in the long term, even if we have losses with some positions.
