My Thoughts On The Stock Market

My Thoughts On The Stock Market

If you really want to get rich and are serious about investing, there is no better place than the stock market. Whether you trade with a broker firm or with an online stock platform, getting into the stock market can be easy to do but hard to master. There are hundreds of different companies and options to choose from (see https://kryptoszene.de/aktien-kaufen/dividenden-aristokraten/ for an example), each with an interesting history in their stock value. How do you know which one is the right one? Do you trust your instincts or your intel first?

Stock investment is indeed one of the quickest ways to fill your bank coffers, but it doesn’t happen overnight. The stock market is the only place where you can control the flow of your money and possibly make a good profit too. Today, I am sharing some of my thoughts on the stock market.

It is not for everyone

Stock marketing investing is not for everyone. I have been burnt by the market before. At the time I was only a beginner and bet the $1,000 I saved on a company that I thought will be doing great. Unfortunately, I was wrong and the value of my investments quickly deteriorated. After that, I didn’t invest in stocks for 3 years. I understood one thing, the stock market isn’t for the faint of heart. If you can’t handle volatility, you should never invest in the market directly.

Education and research is important

During the 3 years that I took a sabbatical from the stock market, I understood that I need to educate myself properly before I entered the stock market again. I would have to take my time and do my research to find the best shares to buy in south africa again. To do this, I first began to learn about the basics of stock markets- IPOs, secondary markets, dividend stocks, growth stocks, etc. I also started to learn about different sectors, indexes and different types of investment instruments. I am still learning but brushing up the basics was a game changer for me. Now, I at least make informed decisions instead of blindly putting my money into any company that looks good to me. Now I put more time and effort researching into some of the best stocks to buy today instead of investing a random amount of money into various stocks that looked like good performers.

Penny stocks are not worth it

I am not saying that all penny stocks are bad. During my research, I have come across some tremendous penny stocks and they have almost always outperformed my expectations. However, the penny stock sector is filled with garbage and companies that would scam you outright. Pump and dump schemes are also very common and you will even see foreign companies avoiding legal IPO route to trade directly in OTC markets. Not all of them are an illegitimate business but they lie in the shady territory. When I lost my initial $1000, it was in penny stocks. I found a stock worth $1 and thought that it would easily fluctuate by 20% and give me a $1,200 fund in the end. I couldn’t have been more wrong.

Understand brokerages and fees

One of my biggest mistakes was not understanding brokerage fees fully. They can easily chip away all your profits. So, if you are making small profits, it is likely that you would end up losing. Whatever little you make could easily be lost because of your broker’s fee. Many first-time investors get to know this baffling reality only when they have traded for a while. I couldn’t believe that I was making money for the brokerage instead of myself.

Now, however, with the rise in the number of online trading platforms, forex brokerage firms look to implement the best CFD white label solutions, and stockbroking firms often implement the latest trading technology; these are offered by many brokerage technology providers to increase security and reliability of trades. This way, it could become easier for traders to understand how brokerages work and how much of their returns are actually deducted as fees. Online trading could mean that the transactions are more transparent, and there need not be any confusion regarding any aspects of trading. With a number of reliable online trading options available, traders can more freely dip their toes into the trading waters.

There are different methods of investing

This is an important thing to understand. Stock market investing doesn’t necessarily mean that you sit in front of your computer all day long. You can also choose to invest passively. To do this, buy shares in an index fund or an ETF. By doing this, you will stay invested in the stock market, without needing to actively manage your money. Index funds have historically performed incredibly. If you are in for the long run, you could actually earn massive returns via index funds.

Another method of less-intimidating stock market investing is mutual funds. These funds pool the money of several smaller investors. A professional fund manager then invests your money in different stocks and bonds and gives you a return. Mutual funds can provide you really good returns. It is up to you to actively manage your money (i.e. move it between funds) or simply invest a couple of good funds and watch it grow over time.