How to Start Investing on the Stock Market in the 2020 Crash Now

A Quick-Start Guide to Stock Market Investing

The Stock Market presents everyone with an accessible and affordable way to increase their wealth. Or, as most investors like to call it — ways to use your money to make more money. Over the years, I’ve had the chance to experience this for myself.

  • How to invest: Logic Vs Emotion
  • The Investment Strategies
  • How to Buy Stocks?
  • Passive and Active Investing
  • Stock Research
  • How to Gather Information?
  • Annual and Quarterly Reports
  • Ratios and Metrics
  • How to read financial Statements?
  • Dividends
  • How much should a beginner invest?

Stock Market Basics — What is a Stock

If you’re absolutely new, this is probably the first thing that you’ll need to understand, before you get drowned in technical babble.

How to Invest: Logic vs Emotion

Your investment decisions should always be based on logic, throughout research and facts. Never invest on a whim, or when influenced by emotions. Always do your research!

The Investment Strategies

Investors make use of various Investment Strategies to plan out their market interactions. The most popular ways are:

  • Fundamental Analysis — a strategy, based on external events, trends and outside influences.
  • Passive Funds — a long-term strategy, based on market-weighted indexes and portfolios.
  • Behavioural Financial Strategy — an innovative strategy based on the behavioural finance approach.

How to Buy From The Stock Market

Personally, I use

Passive and Active Investing

Passive investing is excellent if you’re working on a tight schedule. If you only have five or six hours per week to spend on Investing, then passive is the way to go. Personally, I find that passive investing is less stressful, and I enjoy the fact that it’s focused on long-term investments, primarily due to time constraints.

Stock Research

If you want to be successful on the Stock Market, doing your research is absolutely vital. No matter which strategy you choose, you can only benefit from knowing more about the market and the companies that you work with.

Quantitative and Qualitative Research

Most people usually spend the majority of their time on quantitative research (looking at the numbers), and about 20% on qualitative research (looking at the “quality” of the business).

  • Qualitative research — you’re looking into the company’s mission, vision and values. Their culture and leadership. This helps you figure out more about the long-term future of the business, and allows you to see beyond what the numbers and statistics can tell you. Qualitative research also helps you spot potential problems, scandals and setbacks ahead of time.
  • Your Brokerage platform — Most of the big brokerage platforms offer a plethora of information to their clients, which is where you’ll be getting a decent amount of your data. Generally, they’ll have all of the reports and the majority of statistics freely accessible.

Annual and Quarterly Reports

Companies will publish reports, covering the numbers from the last period, with annual reports covering an entire year, and quarterly reports, focusing on the last quarter. These reports will also contain the company’s plans, hopes and projections for the future, laid out in detail. A word of caution here: These reports are published by the companies and aimed at potential investors. Expect things to be at least somewhat focused around presenting the company in a good light. After all, they are publishing this in the hopes that readers will invest in them.

  • Quarterly Reports (Form 10-Q) –Much shorter than the 10-Ks, Quarterly reports are meant to give investors a quick, focused overview of a given period. Frequently, 10-Qs will reflectively reference 10-Ks, underlining projections and predictions. They are a great way to learn about what’s happening with the given company right now and are definitely worth the read.

Ratios and Metrics

The ratios and metrics will help you discern the stable companies from the volatile ones. They are yet another crucial tool that you’ll need to master in your investment journey.

  • Beta — Indication for volatility. The average for this metric is 1, with lower values signifying lower volatility. Less volatile companies are less likely to rise or drop along with the market rapidly.
  • Earnings Date — This is when companies publish their Quarterly Earning Reports. A lot of these reports are public, and you can freely listen to them.
  • Volume — How much that stock is being traded.
  • Dividends — A certain small percentage of the company’s earnings can be paid out to shareholders, in the form of dividends. Some stocks will have much higher dividend ratios than others.

How to read financial Statements

If you’d like to understand financial statements and their significance better, I’d highly advise you to have a look at some accounting materials — a basic course or a short book will do.

  • Income Statements — Company revenue and income trends.
  • Cash flow Statements — Where the cash is coming from and where it’s going.

How much should a beginner invest

When you’re a beginner, I’d highly advise you to start small. Yes, just like any other change in your life, your first steps in the world of Stock Market Investing should be taken slow. There is nothing to rush for, the Stock Market has existed for over 400 years, and it will continue to exist long after we’re done with it.

What comes next?

As always, I’ll leave a bunch of useful articles and videos, along with my favourite books in the resource section down below. But, if you’d like a more personalised approach, I’ve got something special for you! Over the last few months, I’ve been working on an investing course, designed to help beginners take their first steps in the Stock Market. It features a few modules, packed full of helpful and beginner-friendly content. For more information about the course, please refer to the small form on the right to subscribe to my weekly newsletters and stay tuned for updates.

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