i remember doing mock stock investing back in econ class in high school but i never really took it so seriously. now i feel like i want to invest in stocks so money will grow. but what are basic preparations for it? i remember doing excels in high school to monitor the stock investments. but i have no clue how to
i remember doing mock stock investing back in econ class in high school but i never really took it so seriously. now i feel like i want to invest in stocks so money will grow. but what are basic preparations for it? i remember doing excels in high school to monitor the stock investments. but i have no clue how to do those anymore. are they really needed? and is the money you make in stocks withdrawable after a decade? i just read stories of people passing away but were hidden millionaires by the time they expired and left behind millions. does that mean they never got to use the money they accumulated? can someone give me a metaphor of how investing in stocks work?
I teach investments and worked in the field for decades. I have been a researcher as well as a professor.
The first thing you need to do is find a full service broker, such as Edward Jones to assist you for now. This is like dentistry, you do not want to try DIY dentistry if you do not know what you are doing.
After that, start reading. Reading is a big deal. The first book you should read is "The Intelligent Investor," by Benjamin Graham. It was last published in 1972, as Graham died in '73, but it is still in print. There are a few things that are outdated, but not much.
After that, pick up either a managerial accounting textbook or an accounting for dummies type book. You just need to really understand the basics of accounting. You do not need to be able to do accounting.
Once that is done, read Graham and Dodd's Security Analysis. There is a version by Cottle which is good for someone whose accounting skills are still weak and the 1946 version of the book has been updated recently so that you get the original book, but with modern commentary.
Once you are done, find stock screeners that will let you choose stocks and evaluate them per the books.
If you were my student, I would assign you these books. I have had students come back because they had been consistently losing money and now they are consistently making money.
Do prepare to be very bored. This is an unexciting profession. If you are bored, then you are doing it right. If you are excited, then you need to take a break. Because of the biochemistry of the brain, a person who is excited cannot cognitively experience risk. The calculation portion of the brain is turned off. If you are bored and have trepidations all the time about what you are doing, then you are doing it correctly.
Buying stock is owning a piece of a company. Take a stock like MCD you would buy say 100 shares at 120 so put in 12K then quarterly they give you a small dividend like $89 so you are getting a return on your investment and pay taxes on the dividend. If you should choose to hold it that is all that happens, if you want to sell you will get whatever the price is at that time so if selling at 200 a share you would make 80K but it might take decades or might even fall in value or go out of business.
Mutual funds or ETFs are a market basket of shares of companies so you never can lose it all even if a single company goes out of business. It allows diversification and they give a return at least once a year of gains and dividends. This is simple since your basis is always what you paid for the funds and you pay tax every year on the returns. The value should go up over a very long term.
I like to invest even amounts in funds so remember my basis so if investing say 10K you might choose 2 funds at 5K each like a small cap and large cap fund for diversification.
What I recommend is buying a S&P 500 fund with no loads and very low fees from a company like Vanguard or Fidelity inside a ROTH IRA if you don't want to touch it for a very long time at least 5 years but preferably until retirement.
The purpose of a stock market is to facilitate the exchange of securities between buyers and sellers, First off all get PAN card and then open your Demat Account.A stock investment is vary easy but it is to difficult when you are confused about this. you have buy some business books these books is vary helping for your investing and also concern the good financial advisor. because you can not take a risk your one confusion or on mistake is cause of a big loss.stock investment is divided the segment you can choose segment and invest them.
Buy low sell high.
I base my decisions on buying on graphs .
Also read the news. Now trump will be president certain stocks or companies will benefit. Some will loose out.
You can sell your stock at any time.
You might want to consider mutual funds instead
Buy mutual funds