How to invest in the Stock Exchange? Basic guide and tips
Invest or save your money? For some experts the first is the best option and a route is the Stock Exchange, but it may seem like a complicated operation for big businessmen. We give you the steps you must follow to ensure your success when investing in the Stock Exchange.
Have you ever thought about the possibility of investing in the Stock Exchange, but imagined that it was an exclusive market for top executives and well-known brokerage houses? In reality, anyone who has money and a little time to manage their investments can participate and invest.
Investing in the stock market is also a process carried out by companies when they need capital to finance their operation or their growth and expansion plans. This money can be obtained by transferring part of the company to the investing public that is, selling shares. In this way, the company will become the property of many shareholders, who will have political and economic rights over it.
This is how it becomes a market for buying and selling shares of companies of different sizes and turns. And any entrepreneur with a little capital can become an investor in the Stock Exchange. Which can mean an interesting way to increase capital?
The person should consider investment in shares as medium and long term. However, you can sell it at the time you want or need, but the price you get will depend on the market’s liquidity. So you could recover less money than you invested.
If you are a beginner in this topic, we share some basic steps that you should take into account:
Make your investment plan and set profitability goals. With this you will know how much you can invest in the Exchange and at what term. Design the management of your assets and decide what percentage of the total will be invested in the stock market. It can range between 10% and 100%, depending on each investor.
Know the profiles of investors. If you are going to invest, what kind of investor would you be? You can be a passive one, that is, with a low risk and with less time to devote to managing your portfolio; or an active one, with a high risk, more hours, but you could invest in stocks or currencies. From banks to brokerage houses have advisors to guide you in your investment, which indicate the risks and mechanisms to make the best decisions.
Define investment objectives. Why do you want to invest in the Stock Exchange? Keeping this determination in mind will make you avoid making decisions lightly and you will know how to withdraw when you have to do so to set new goals with new investments.
To start it is recommended to choose a mutual fund of debt instruments. Check the historical returns of funds of this type that are in the market.
Check the fees that you will have to pay (according to the investment channel you choose) in terms of purchase, sale, and administration. The commissions can “eat” good part of your earnings.
Check periodically, together with your advisor, how your investments are going. If you have not given the results you expected, evaluate the changes you need to make to refocus the path.
Your advisor should give a timely and clear answer to all your doubts, as well as help you invest (build investment portfolios either with shares or with different variable income investment funds) according to your level of risk tolerance, term of the investment, financial goal, current financial situation, etc.
Invests only with financial intermediaries that are duly authorized, regulated, and supervised by the National Banking and Securities Commission.
Invest in the stock market with a vision of the entrepreneur. Think about what great company you would like to be “owner” and participate in your profits. The investment in the Stock Exchange is not a game, it requires patrimonial decisions.
Invest only your surplus
Remember that in the Stock Market you should only invest that money that you will not need for at least six months, and that it is a surplus of your savings.
Always consider investing in stocks as a long-term investment, opening your dream business or your retirement – to name a few examples – will be your best ally.
Take care of your investment term. The stock market is volatile, do not be scared if in the short term you have losses, hold on, and do not sell. Probably at the end of your investment, it will recover.
In addition, we will give you a series of recommendations that you must follow if you wish to increase your chances of success in this type of investment.
Search and review all the investment manuals you can. On the internet you will find many.
Rehearse and simulate
You cannot learn without experiencing. For this you have investment simulators so you do not put your money at risk. Visit web portals like Dhanashri Academy where you can invest virtually and practice your knowledge.
Find out about economic and political events
You will need to constantly review the newspapers and specialized magazines that inform about all the markets that influence the funds in which you have invested. This way you will obtain the necessary information for decision making.
Do not be guided by the forums
Remember that in those media many people think good and bad faith. Better adhere to the technique you have learned and be guided by more objective data.
Do not increase risks or your assets
Although the stock market is very striking, preferably invest only your money. Keep in mind that “nobody can assure you a performance in the stock market”.
Check the contract
Well learn all your obligations as well as the brokerage house.
On the other hand, you will find a series of myths that you should leave aside when making the decision to invest in the stock market, within them we find:
Winning on the Stock Exchange is a matter of luck. To obtain the expected returns, it is necessary to carry out an analysis, have an advisor, and have the investment portfolio that matches your profile.
You must be an expert. In all brokerage firms and investment funds have teams that meet to analyze financial markets. You are never alone in making decisions.
When the crisis comes you must take out your money. Yes, there is a risk that investments in the stock market may fall, but in the long term they may recover.
Investing in gold is a better option. Not precisely, it will depend on the price in the market, so it does not always mean that you can sell it more expensive than you bought it.