An easy tutorial with step-by-step guide for beginners how to start investing in stocks
This completely free, easy and simple step-by-step advice helps you to start investing with no previous financial background required.
With over 18 years investment and corporate banking background in European largest banks I created valueinsiders.com with the idea to share simple advice for investment beginners. My aim is to help the reader to start investing as quick as possible, without costly mistakes. I believe that with consistency, continuous learning and with right mindset, most beginners are able to succeed and earn above average returns for their money.
For start please read through the 3 simple steps. And then in the bottom of the page you find a link to the 4 part series of training for investing beginners. Take it seriously as if you will follow it, it will change your future.
Good luck and please free contact me if you have any questions.
STEP 1: CHOOSE DISTANCE
Investing is similar to long-distance run. The runner should take the length of distance into account, and should know the possibilities to pass the distance successfully.
- The time horizon. If you have decided for how long you are investing money, the making of investment decision will be already much simpler. The longer the time horizon, the broader the options.
- The aim could be of any kind. Financial freedom with stable income from USD 100,000 portfolio or the school fund for the child or average income at the retirement age.
- The financial aim should be definable in numbers. If you have fixed the number, it is good to check within time whether you keep to the chosen track.
STEP 2: RIGHT MINDSET
Right mindset is one of the most important factors in achieving success. There are millions of individuals trading and investing their money everyday in stock exchange. Most of them lose money because of the wrong mindset.
- The most important thing is consistency and specialization. In sports the athletes become the winners of the Olympic Games also only due to their specialization and consistency. This is so in case of investing. I strongly recommend to read my post about developing investment philosophy.
- Develop survivor attitude. Sometimes the shares in your investment portfolio could have red minus signs behind them and the rate of return could be temporarily negative. This happens to everyone. The times when the whole stock market is in panic, the successful investors make the best investments ever.
- Understanding the difference between price and value. The separation of emotions are simple when the investor understands that the value of the company and the price of share do not go hand in hand. Panic is the fastest way to lose money. We do not panic! I wrote about it in the article talking about speculating and investing which I recommend to read.
STEP 3: CHOOSE THE BEST BROKER
Beginner investors generally start investing with small amounts and the transaction costs play key importance as they are eating up the potential rate of return. Still, do not favor hyper cheap second-rank offshore or whatever brokers because your account is not big enough. You will soon understand that your money is safe only in the hands of quality brokers!
- I personally recommend OptionsHouse.com (by E-Trade company) for value-oriented pricing and fees that are transparent. Their trading platform is perfect for beginners as you can trade stocks, options, easy-to-use, has powerful technology, it is world famous E-Trade company and last but not least, it has low fees. E-Trade is one of the world’s most reputable brokerage companies listed also in Nasdaq (Ticker: ETFC), it is registered in the US with the service network all over the world. But there are lot of other good brokers out there, that are also suitable for those with smaller starting balance.
FINAL STEP: START TODAY!
It is important to start today, experience comes with time and by learning from others. So please also see my list of 75 Best investment books here…
When I have talked about the motivation of hobby sportsmen and -women, I have stated humorously that it is most difficult to reach from the sofa to front door, everything else comes by itself. Remember that every 6 years by which you postpone the beginning of investing, means that you should invest twice as big amount for achievement of the same result. It is much more pleasant to live with the knowing that you have already made this important step. The feeling to be an investor is great! Even the investor with 100-dollar portfolio.
Next! Learn how to start investing! 4 part tutorial for total beginners »