Recommendations: stock market
The well-known stock exchange is nothing more than a private organization that offers necessary solutions so that members can carry out negotiations for the purchase and sale of shares. The stock market itself acts as a market in which the members, in favor of the needs of their clients, grant them varieties in terms of investment tools.
Most novice investors are hesitant when it comes to dealing with the stock market . Is investing in stocks for me? It is a reasonable doubt since investing in the stock market may be appropriate for many investors, while not for others.
Taking into account the growing and accelerated evolution of the current investment market, many new entrants in this matter are overwhelmed and sheltered by the number of options, alternatives, offers, demands and demands. However, it is not an impossible task to accomplish, but neither can it be taken lightly: the slightest misstep can be the difference between financial success and failure.v
Tips for investing in the stock market for beginners
What will determine if investing in the stock market is an alternative for you, will be your investor profile and the strategy you develop to invest. Let’s see, first of all, a brief description about the operation of the stock market.
Investments in the stock market work through negotiations in the purchase and sale of shares, such as being part of corporations or corporations that require shareholders, bonds, participation titles and certifications. Their function is to strengthen the capital market and help with the financial and economic emergence of the region where they are established.
Investing in stocks may seem difficult, but it is not. Stocks are securities that have a price that depends on various factors related to the market in which they are traded. Company shares are equity investments. This means that the investment is made today in any action. No company has the ability to guarantee profitability in the future.
Since it is not possible to ensure profitability, investments in the stock market require an investment strategy that minimizes the risk of loss to the maximum. For this reason, follow some of our recommendations for investing in the stock market on our blog.
Before that, it is important to point out that the following recommendations are made in a general way, so it will continue to be advisable to seek the support of an independent financial advisor, in terms of making important decisions when investing in the stock market. In other words, and perhaps using a game about it, before any other recommendation, it is advisable to have the support of a professional in the field who dominates the subject in favor of the interests of his client.
Logic in the Stock Market.
So, what is the logic that should prevail to invest in the stock market? Here are some bag recommendations for newbies:
There are two ways to make money with stock investments. The first, and which turns out to be the most logical, is based on the purchase of shares that are at their minimum price (due to circumstantial circumstances), to be sold later at a much higher price, once the particular conditions that have caused the drop in titles.
The word conjunctural is the key to understand this concept. Some shares that are traded on the stock market lose price due to temporary circumstances, which affect their credibility and in a certain way make shareholders nervous, generating a large sale offer that produces a falling price per share.
This type of preliminary study is the key to streamline and master the codes that are handled within the investment in the stock market. Before making a direct decision, knowing the field, the pros and cons, the concepts, the possible projections, the conditions of financial behavior, among other factors, will be decisive in many moments to direct our course as investors.
How does it work in practice?
The most important thing in these cases, for a novice investor, is to clearly identify a temporary or conjunctural effect on prices and differentiate it from structural circumstances that will affect the price definitively and do not allow a subsequent recovery, which will cause us to lose money.
Many oil companies around the world have lost their value due to the drop in hydrocarbon prices. It is highly unlikely that oil prices will recover in the near future. Therefore, this is not a circumstantial condition. On the contrary, it is a structural circumstance and logic advises us not to invest in these companies.
On the contrary, the loss of credibility that a Company may have, due to rumors or scandals in the personal life of one of its directors, causes a loss of value of the company in the stock market, a circumstance that we must take advantage of. to acquire shares, since in a few weeks the price will recover and we will have interesting profits.
Taking advantage of this type of circumstance should not affect or affect the credibility of the investor, that is, managing this field in a cold, structured, assertive, broad, and above all coherent way, adds points when facing new challenges in the future. , in addition to providing the individual with credibility and trust (two important elements in the financial world)
Before you start investing
When deciding to be part of this market, the right thing to do is find out how this organization develops and how those who are part of it work:
To organize the finances!: Before making investments in the stock market, the main thing is to make a budget between the income and expenses that you have, to establish the amount that is going to be invested.
Define the objectives: This consists of knowing what you want to invest and what will be achieved with the money invested.