The aim of writing this article is to help those who want to start in the world of the share market for beginner. Because in my early days I saw little information about starting to operate.
People when we do not know something we think is difficult but in this case it is the opposite. Since investing in the share market for beginner is easier than we think, only that we need information.
The Exchange has greater security, profitability, liquidity and flexibility than any other asset . Therefore, investing in the stock market is interesting for the entire public. Since in the long term it is very profitable, through dividends it gives stability.
- First of all we are going to name the advantages that we have when investing directly in the share market for beginner
- Second, we will give the guidelines to follow to invest in the share market for beginner
- In third place we must know the schedules of the markets
- In fourth and last place I can only talk about the choice of a broker
- Periodic Income : It is a very important advantage since the portfolio of securities that we believe will generate income for dividends of the shares. We must bear in mind that the money obtained by collecting the dividends can be reinvested in buying more shares. Or earmarked for own consumption, depending on the needs of each investor.
- Low commissions: They are low if we compare them with those of other assets such as investment funds. Or by operation, depending on the broker we use for perform the operations. Therefore we will have to inform us very well of the broker’s commissions. Before starting to operate in the share market for beginner.
- Total freedom to invest: We have no obligation to buy or sell if we do not see that it is time for it, that is. We are owners of our movements at all times.
- Diligent to decide to enter or exit: We can enter or exit the market at any time, our positions do not influence in comparison to the size of the market.
- Invest in securities that are outside stock indices: We have the possibility to invest in very good companies that do not meet the requirements for size. Or liquidity to belong to any index. These companies tend to have a higher profitability. One thing to keep in mind is that companies that meet the requirements for capitalization volume. And liquidity are often introduced in the indexes. But their fundamental analyzes are unfavorable. I recommend that not only because a company belongs to an index does it mean that we should invest. Since not all are solid and profitable.
- Dividends paid: We must be aware that the dividends paid by companies are not reflected in the stock indices.
Whenever a person is full and thrifty it is possible that the returns obtained by investing in the stock market are good. And stable, more than in any other investment, despite what the vast majority thinks. Only that he has to learn some simple guidelines without need to have prior knowledge.
We know that the future in the economy of any person is determined by:
We are wrong when we think that the idea of enriching ourselves is to earn a lot of money. Because I think it’s not true, we get rich when we save. Just because you make money you do not get rich, as the saying goes. You do not have more than The more you earn, the less you need, with this I mean that although we earn a lot if we spend everything. We do not get rich either, so we have to know how to save and invest those savings in creating more wealth .
Returning to the issue of investing in the share market for beginner, the first thing we must do is create a management of our assets. We know what we have and decide the total percentage to invest in the share market for beginner, that will depend on each investor. Then we choose a strategy , and in this step we need some basic knowledge. For which we must be clear about the basic concepts about the result of the company. Once invested in a security, it is important to keep track of the quarterly results presented by the company.
The fundamental analysis tries to determine the value of the companies based on their results and the assets they have.
PER: It relates the market capitalization of a company with its net profit, that is, its profit per share with its price per share. It tells us how many exercises are necessary so that the benefits generated are equal to your market capitalization.
PRICE / CASH FLOW: ratio used to compare the market value of a company with its cash flow. The lower the ratio, the better its value will be.
PRICE / ACCOUNTING VALUE: measures the relationship between the price at which the shares are listed. And the value of their own funds, that is, the book value of their assets less the book value of their debts.
- Therefore we would have a purchase opportunity.
- The company is quoted at a price close
- The price at which it is quoted is higher
ROE: measures the performance obtained by the shareholders of the funds invested in the company, ie the ability of the company to remunerate its shareholders.
NET DIVIDEND PER SHARE: Divided by the number of shares.
PROFITABILITY PER DIVIDEND: measures the percentage of the price of one share going to the shareholders in the form of a dividend each year.
NET PROFIT (MILLIONS): is the benefit that stays in the company after covering all expenses and taxes.
EBITDA (MILLIONS): is the gross operating profit calculated before destructibility of expenses.
BPA: it is the part of the profit that corresponds to each share of a company, it indicates the profitability of the company.
In third place we must know the schedules of the markets
In the opening auction from 8:30 am to 9:00 am, you can enter, modify and cancel orders. But without crossing operations since the order book is not yet available. The random end of the auction (30 “), within the period of 30 seconds, ends without warning. It serves to avoid manipulations of prices.
The continuous contracting market is open from 9 a.m. (once past 30 “) until 17,30h .
In the closing auction it happens exactly the same being the 5′-hour slot that would be from 17,30h to 17,35h and will also end with a random end of the 30 “auction.
I leave a link that may interest you if you want to expand the topic.
In fourth and last place I can only talk about the choice of a broker
As we know to be able to invest in share market for beginner we need a broker. The doubt that invades us all is that of which broker will be better or of which we can trust. My advice is the one that a university professor told me. If you do not know any broker in principle it is better that you go to your bank where you have the current account. And negotiate with them some fair commissions. If it can not be and your bank charges many commissions. You should study all the brokers in detail to see which one convinces you the most.