What you need to know a novice investor

On the stock exchange, you can earn millions or lose them. We figure out how much money you need to start investing, how to choose a broker and whether there is a guaranteed way to get rich by trading on the stock exchange.

Why invest and whether it suits me?

Suppose you have a bank deposit, but you are not satisfied with the interest, they are too low, and you want to earn more. But you must understand: the higher the opportunity to earn, the higher the probability of losing all the money. If you are aware of the risks and you have available funds, it may be worth investing in securities that are traded on the stock exchange.

For example, a stock is a equity security that is evidence of ownership. When buying shares of a company, you buy a share in it (even if it is very small). You can receive income from the sale of shares or dividends – a part of the company’s profits for the end of a certain period.

A bond is a debt security for which the issuer – the state or the company that issued it – is obliged to pay a certain percentage in the future.

The easiest way for a beginner is to buy securities, and after a certain time to sell at a higher price – and so earn. The main thing to remember is that profit is not blind luck, like in a casino, but the result of well thought-out actions. Not a game, but a job.

Do not invest the last money if you do not have savings and a deposit in the bank. If the bank goes bankrupt , the state will return the depositors money – within 1.4 million rubles. There is no such insurance on the stock exchange, you can lose everything. Moreover, the fall in the value of securities occurs much more often than bank failures.

I want to try. Where to begin?

Modern stock exchange – electronic, you can trade via the Internet without getting up from the couch. But for this you need a broker – a broker, that is, a company that has a license for exchange trading. Before you go to the broker, it is worthwhile to determine for yourself a few important things.

1. Estimate how much you are willing to invest.

Theoretically, you can start with any amount, even with 1000 rubles. But such a volume does not compensate for the broker’s commission or the time spent on trading. It is worth starting to invest if you are ready to risk several tens of thousands of rubles. It is better to imagine in advance the situation in which you lose your money. If you understand that this is not a disaster for your budget, you can try.

2. Think how much time you are willing to spend

And depending on this, decide whether you are ready to trade on your own or trust a professional. 

You will have to undergo training, immerse yourself in the topic, study statistics and stock reports in the mornings, follow the charts throughout the day. If you are a responsible investor, of course. Ready for this? Then you can go to a brokerage company to use it as an intermediary to access the stock exchange.

3. Choose a strategy and assets

Decide what you will invest in. Stick to a specific strategy.

What is a strategy? 

A strategy is a set of investment parameters that determine your style of behavior on the exchange: what assets do you sell, how often do you sell, what are you guided by when making decisions (for example, see the news that affect the market).

The simplest version of the strategy – you choose:

  • assets;
  • the period for which you want to invest;
  • maximum amount of damages.

Suppose assets are shares of pharmaceutical and chemical companies, the period is 1 year, the amount of losses is 20%. In this case, you immediately sell assets if they have fallen in price by 20%, even if the year has not yet passed.

If you have chosen trust management, then you also need to decide on a strategy. Only in this case you will choose from the offers that are already on the market.

4. Find an intermediary company

When you decide on a strategy, it will be easier to find an intermediary (broker). The most important and paramount when choosing a broker is that you can only trust money to companies that have a license from the Bank of Russia. Check with the list of licensed companies. As a rule, the same companies can both take money in trust and provide brokerage services for independent trading.

If you choose self-investing, you have to go the following way:

  1. conclude an agreement with a broker;
  2. open and replenish a brokerage account;
  3. install a special program for bidding;
  4. start buying and selling.

If you have chosen the path of trust management, it will be enough to enter into a contract and transfer the money to the management company.

Frequent mistakes: how not to do

  • You can not invest in securities all that you have
  • First, set aside money for life and unexpected expenses. Create a “safety cushion”: open a bank deposit – and only then proceed to exchange trading. Invest the amount with the loss of which is willing to accept.
  • Do not act on chance – get trainedIf you decide to trade on the stock exchange yourself, be sure to go through training. Most brokers provide courses for beginning investors. In trading programs, there is often a demo mode: you can try your hand at it without the risk of losing money.
  • Don’t be emotionalActing impulsively, you can make a lot of mistakes. A novice investor should not respond sharply to the slightest price movement on the exchange. But we must act decisively, if the price changes significantly. Set the limit of losses that you are willing to bear: for example, if your assets have fallen in price by 20%, you need to sell and, as they say on the stock exchange, fix the losses. In other words – you are ready to accept the loss of 20% and complete the bidding to avoid even greater losses. The desire to wait still – suddenly “bounce off” – will be great, but there is no need to give in to it.
  • Do not put all your eggs in one basket.It is better to buy securities of companies from different industries. For example, when oil prices fall, the securities of all oil and gas companies suffer. If you acquire the securities of companies in various sectors of the economy, such as the chemical industry, engineering, telecommunications, this will help you reduce the risk of losing the invested money (or, as financiers say, diversify risks).
  • Do not believe promises to earn 500% per day
  • To guarantee anything in the stock market can only charlatans. A responsible broker should warn you about the risks. The situation on the exchange is changeable, and only you are responsible for the decisions made.

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