For anyone who has never invested a dollar before, looking at the stock market can seem a little intimidating. Unlike traditional fixed income applications, investing in stock market shares seems to be a complicated and difficult activity for most people.
However, investing your money in stocks is a simpler and more accessible process than you think. If done with caution and in the right way, investing in the stock exchange can be a great opportunity to ensure excellent returns.
So, if you are afraid to venture into the stock market or just don’t know where to invest your money, don’t worry: in this article, we will present a simple and practical guide on how to enter the stock market. All you need to do is follow our five tips below and start investing your money safely. Check out
Collect enough money
Although there is no minimum amount to invest in stocks, it is recommended to save a reasonable amount of money before you start investing. A good value to start your activities is from 5 thousand reais.
This is because it does not pay to invest small amounts in the stock exchange, as the various expenses with brokerage and custody fees charged can “eat” everything you can earn. By investing very low values, the costs will be greater than your profitability and will make you lose money.
Open a brokerage account
Stockbrokers are the institutions that connect investors with the stock market. Therefore, everyone who wants to invest in shares on the stock exchange must first open an account with a broker.
It will be through it that the investor will buy and sell shares and execute all of his orders, through a call to an operator (broker) or through the internet platform (home broker).
Currently, there are more than 80 brokerages authorized to operate in the Brazilian stock market (BM & FBOVESPA). Each brokerage has its own characteristics and offers different services. Therefore, in order to choose the right broker for your profile, you must first research what tools and products the broker offers, in addition to assessing how much it charges from brokerage and fees.
Another important measure is to check if the broker has a good reputation in the market and find out if it provides good customer service.
Find out what your investor profile is
For those just starting out, it is important to know that investing is not simply buying shares that promise to perform well. It is necessary, first of all, to understand which investment style is best for you. That is: to know your investor profile.
Usually, investors are divided into three different profiles, drawn according to their personality, their risk tolerance, their goals, and the term they intend to leave their money invested in. The profiles are:
→ Conservative profile: they are risk-averse people, who prefer to invest in stocks with little profitability, but with fewer chances of losses and more security. They intend to use the money in the short term, in a maximum of one year.
→ Moderate profile: for more risk-tolerant investors, who seek good returns without having to give up security. Usually, this profile mixes different types of investments in your portfolio, seeking a balance.
→ Aggressive profile: they are people who invest more boldly and who have a lot of time to recover possible losses. For this reason, they prefer riskier papers, with a high yield perspective. They aim to make short-term gains and grow their equity over time.
Study well everything you can about stocks
To be successful in your investments in the stock market, the ideal is to study and learn everything about the stock market before you start investing. There is a lot of information about the financial market that you need to know before taking any steps.
Therefore, familiarize yourself with some of the basic principles of the market, spend a lot of time taking courses, reading books, participating in discussions on the subject, and regularly accessing websites on the subject. Don’t forget that the best investment possible is the one you make in your education.
5 mega simple steps to start investing in the stock market
A good way to put your knowledge into practice before investing is to use online stock market simulators. They are platforms similar to the real system of the exchange, which allows you to train the buying and selling of shares on the exchange, without having to commit your real money.
Start investing little by little
When you feel ready and safe enough to start your stock exchange experience, start investing little by little, gradually. One suggestion is to start by buying so-called index funds, or “ETFs”, instead of already buying shares in some company.
They are also shares traded on the stock exchange and work as if they were a “set of shares” in a single asset. Starting with ETFs, you will be protected from the risk of investing in individual stocks and can gain more confidence until you venture into other roles.
By following these tips, it is possible to start your investments in the market smoothly and without scares. But, remember: investing is a path, not an end goal.