The stock market can be extremely confusing to beginner investors. This causes them to put their money in mutual funds managed by “professionals” so that they don’t have to learn how it all works themselves. The industry wants you to believe that experienced fund managers are the best place for you to entrust your money. But many times that isn’t the case and the funds managed by the pros don’t even beat the market.
The simple truth is that stocks only have two directions to go: either up or down. This means that when you buy a stock, it will over time go up or down. How hard is that to understand? I think not hard at all.
There is no doubt that the amount of information about the stock market and individual stocks is massive. You can spend hours, days, and months just scouring the Internet and watching stock shows on television. The end result might be that you end up more intimidated and confused than when you started!
But again, you need to remember that while the plethora of analysis may be overwhelming, any stock you choose to buy can only go up or down. Just two directions.
Do You Know Anyone Who Buy And Sells Stocks?
If you ask your friends, family, or anyone else you know about their investments, chances are they know very little about the stock market. If they have savings at all, chances are they put the money in a mutual fund and have mostly forgotten about it.
Very few people take the time to learn about stocks and then buy them individually through a discount broker. Most people don’t have their own portfolio of stocks because they just never care enough to get started. It’s a shame because any money you earn and save is money that you worked very hard for. To just hand it over to someone else you don’t even know to manage seems silly and risky to me.
I Recommend Starting Small And Learning As You Go
I chose to start young and learned how to buy stocks on my own. I bought one stock at a time, as money would allow. It is a decision that I am thankful for to this day. I now know how to manage my own money and I don’t have to rely on someone else who I don’t even know.
If you do want to start your own portfolio of stock investments, begin by remembering that its not as complicated as you might believe: stocks go up and down and if you pick the better companies, over time you should make money. Investing and growing your savings is a life time activity, not something you do for a month or two and give up on.