interest rate is low, many people choose to put their savings in investments in
the stock market. But investing in the stock market is not easy and requires a
few skills to do it well.
will look at important aspects of investing in the stock market, which will
reinforce the idea of the need to train in this regard.
You have to know
what the Stock Market is
The Stock Market
is a market. Would you dare to intervene in the art market? Do you think it is
optimal to operate in the cattle market without knowledge? If the answer is no,
unless you have training via stock market classes in this regard, apply the
same for the Stock Market. The Stock Market is a market in which savers and
companies need funds to make their operational investments operate. In general,
we differentiate between the primary market (stocks, bonds, etc., are acquired
and traded directly). Then these shares and bonds can be purchased and
exchanged, no longer by businesses but by savers and investors, creating the
secondary market. In addition, you should know that you can invest directly or
do it through an investment fund.
When is it
optimal to invest in the Stock Market?
Not all moments
are ideal. If the interest rate that financial institutions pay you for your
savings is low, it might be good to invest in the Stock Market since the yield
will be higher there. Although this argument may seem easy, it is not so. One
has to take into account the risk they want to take with the investment. In the
Stock Market, the yield is variable, which means that you do not know what
yield you will obtain. And we are not talking about whether we will get 3% or
12%, but that the return may be harmful; that is, your investment may lose
value. Also, if an investment "promises" very high returns, your risk
will be increased, and that can lead to high losses. How to balance
What kind of
income can I get if I invest in the Stock Market?
In addition, you
have to know where the investments to be made will come from. On the one hand,
our investment can pay us dividends. The company has obtained benefits at the
end of the year and is paying back its shareholders. But the company does not
always pay dividends even if it has had those benefits. The other way to earn
an income is by making capital gains by selling the shares. That is, selling
the investment for a price higher than the purchase price. How these ways of
obtaining returns are combined is not trivial, it requires a detailed analysis.
With whom do I
"compete" on the Stock Market?
In the Stock
Market, there are many operators, and most of them are experts on the subject.
Most agents and brokers have been trained a lot in the stock market and
investment, so if we are not at their level, surely we will choose the wrong
types of investments, terms, and times.
terminology is not easy
Do you know
exactly what the terms mean: par, the underlying asset, book entry, arbitrage,
beta, junk bond, market capitalization? If you don't know how to define them
precisely, you need training, and joining stock market classes is recommended
for proper training.
Do you know how
income from investments in the Stock Market is taxed?
Indeed not, and
it is a critical point. An investment can bring more profit than another, but
at the same time, have worse taxation, and that the extra obtained is cancelled
by the tax effect. If you do not know what is going to return from movable
capital (and, if within this concept it is a return obtained from the
participation inequity of any entity or is returns received from the transfer
to third parties of own capital) or to capital gains, you need some specific
training in this area.
And finally, it
is not enough to choose the stock market investment
We must follow
the investment made, inform us of the results that the company is obtaining, or
the evolution of the investment fund. And we must do it systematically over
time. With this information over time, we must determine when to keep the
investment, when to sell it or when to expand it.After seeing all this, it is clear that one
needs to train seriously and rigorously to make investments in the Stock
Market. And that we are aware that it is a market for experts, so we must
always continue preparing every day.