A Complete Beginner's Guide to Investing in The Stock Market

Investing in the stock market may seem like a daunting task, but in truth, it’s simple, and has been overcomplicated by a long line of false narratives and stereotypes.

The amount of people I see online who say things like:

• “But how do I start investing?”

• “Can you help me to start investing?”

• “I don’t know how to invest!”

Guess what… it’s easy! And we’re here to help.

In this blog, I’ll take you through a simple step-by-step guide on how to start making your money work for you by buying assets on the stock market.

What is Investing?

Investing is a simple concept, and can be used in more areas than personal finance.

Investing means to dedicate something, with the aims of acquiring more of something in the future.

In this case, you’re dedicating money, to enjoy more:

• Money

• Time

• Freedom

• Happiness

…in the future, by purchasing assets.

In truth, everything in life is an investment.

• Going to the gym is an investment in your physical health.

• Going to the pub is an investment in your social and mental health.

A lot of investments are to do with improving your health in some way.

• Physical

• Mental

• Social

• Financial

It’s a large reason why we decide to do a lot of the things we do, and investing your money is no different.

Investing into assets like…

• Stocks

• ETFs

• Real Estate

…has helped individuals build wealth for generations and avoid falling victim to inflation, by keeping large portions of your net worth in a bank, losing it’s purchasing power.

Risks of Investing

There’s no denying that regardless of what you’re investing in, you are exposing yourself to even a small amount of financial risk.

But, that’s not to say that you risk losing all of your money, or going bankrupt, but risk is necessary to grow your wealth.

A large part of de-risking comes through personal experience, and I’m going to share with you some actionable tips to help you minimise the risk you’re exposing yourself to.

Long Term Mindset

It’s cliche, but it’s true. The longer you plan on being invested for, the greater your chances of success.

• If you want to invest for a week, your odds of making a profit might be 50%.

• If you want to invest for a decade, your odds of making a profit will be more like 95%.

Don’t think in weeks or months. Think in years and decades.

Delayed your gratification, and the chances of success increase significantly.

Opposite Mentality

If you go with the approach of doing the complete opposite of what everyone else if saying or doing, chances are, you’ll do pretty well with investing.

If there’s a huge amount of fear, this usually means that prices are low, and in the long run, a good place to buy.

If there’s a huge amount of greed, this usually means that prices are high, and in the long run, a bad place to buy, or potentially a good place to sell, depending on your investing strategy.

Know Your Investments Well

The more knowledge you have of your investments, the better you will be at reacting to price movements.

I still remember the day that Russia invaded the Ukraine, and all my investments tanked.

Was I worried? Not one bit. If anything, I was eager to invest more.

Why? Because I knew my investments we’re becoming even more undervalued, and there was a greater margin for profit on the horizon.

A large part of fear and greed (especially on the side of fear: panic selling) is to do with not really knowing what you’re investing in, which is a bad move to make.

Do your research, and never invest your money based on other peoples research or opinions.

Dollar Cost Average

Dollar cost averaging is the only investing strategy I recommend to people.

It involves investing at regular intervals, rather than going “all in” at any given moment.

It takes out a lot of the risks involved with investing, as you’re consistently investing over a long period of time, which means if there’s a dip, you’ll have the disposable income to take advantage of the lower prices.

Don’t make the same mistakes other investors make. Eliminate the fear and greed of investing, and you’re way more likely to succeed.

You’re exposing yourself to a huge amount of risk by investing all your money at once. You never know where the market might be headed for the foreseeable future.

Remove this risk by investing at regular intervals.

Choosing an Investment Platform

The first thing to decide on when investing, is where to park your money, and this involves choosing the right investment platform.

The truth about investment platforms is that they’re all largely very similar, so there’s no need to take too much time on this one.

Investment platforms make their money through fees & commissions, which means that they’re completely free to sign up for. So, this decision isn’t hugely important, as you can create accounts for as many, or as few platforms as you wish.

Regardless of this, if I’m recommending a beginner to any platform, it’s eToro.

It may not be the best, or have the best account for taxation advantages, but it’s the easiest to manoeuvre for a beginner, which I believe to be the most important factor for a beginner.

A lot of platforms can be difficult to navigate for beginners, but eToro doesn’t have that problem.

Once you’ve got to grips with the process, you might want to start looking elsewhere for better platforms or accounts, like any tax advantaged accounts you may have access to in your region.

Like me, who started on eToro, but after a few months, began to move my investments over to Trading212, where I could take advantage of a Stocks & Shares ISA (UK only), which is an investment account which allows me to invest up to £20k each year, tax free.

But if I were you, start easy. Start with eToro.

It’s the best platform for getting to grips with how investing works.

Creating Your Account

Chosen your platform? Great.

Now, it’s time to create your account.

There’s not much to be said here, but its a necessary part of the process. Think of it like opening up a new bank account, only more fun.

You’ll need general information…

• Name

• Age

• Address

And usually some more information potentially including:

• Occupation

• Salary

• Investing experience.

And of course…

Bank details.

Picking The Right Investments

Once you’ve made your account, it’s all about making sure you’re investing in the right assets for you and your financial goals.

It’s clear that this is the most important part, and it’s crucial you choose a diverse range of assets that align with your goals, and you’re not investing based off of emotions, or the opinions of others.

Our help to you here is limited, but take time to learn about different asset classes to find the best fit for you.

When To Sell Your Investments

Investing isn’t a get rich quick scheme. It’s a lifestyle.

When it comes to when to sell your investments, the answer is simple.

Everyone has an objective, or an end goal when it comes to investing.

Why are you investing?

• To grow your wealth?

• To build passive income?

• Both?

It’s your objective that will determine when you sell.

So, the simple answer is, that there is no perfect time to sell.

You might never want to sell your investments. It depends on your goal.

Personally, I don’t think I will ever sell my ETF holdings or dividend stock portfolio.

I’ll simply live off of them.

Buy. Hold. Repeat until you’re financially free.

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