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Investing
Stock Markets: Grabbing The Bull By The Horns
6th August 2007
When I was in my late teens I always wanted to wear a suit and have lots of money. I dreamed of talking sophisticated and being knowledgeable about stocks and investments, assets, property you name it. Then I got it in my head that I needed to be on Wall Street frantically waving my hands up and down and moving millions of dollars in seconds. Well thank goodness I came to my senses and became a Systems Analyst instead!
Ladies and gents despite popular belief, you do not have to be super rich to invest on the stock markets neither do you need to be one of those smartly dressed brokers that act all crazy on the trading floors of the stock markets to understand how it all works. What you will need is when investing in stocks is time. For years those in financial darkness have believed that the stock markets are only for the wealthy. This is so far from the truth and I will teach you that anyone can invest on the stock market. Let us first look at the basics of investing before going further.
- The higher the risk the more you will gain given your stocks investment does well
- The most important determining factor of stock prices is earnings
- What matters when you invest in stock over the long term is the earnings
- Stock prices flactuate on a daily basis and this why as an investor you should be looking at long term performance of a company
- Over short periods stock prices tend to flactuate more because of a lot of environmental factors like investor sentiment, interest rates, inflation rates, political events and so on
- Investing in stocks is risky but risk is manageable
- A diversified portfolio bears less risk than one that is concentrated on a few investments however these hardly ever outperform the market by a big margin
Usually in financial circles you will hear the word shares when people refer to the stock market. What are shares? Simply these are what entitle an individual to own a portion or whole of a company. A good definition given by the Concise Oxford Dictionary defines shares as: "a part contributed by an individual to an enterprise or commitment." Your share or portion determines how much of profits you will receive. Remember that companies can also invest in other companies.
I'm pretty sure you have heard of Warren Buffet, one of the top 2 billionaires in America. If not then you have probably been living under a rock. Warren Buffet made his money from the stock markets. He bought his first share, a single one at age 13. Even today you can buy one single share on any stock market to start you on your investment path. The longer you wait the more you prolong your financial success.
"Investing is simple, but not easy. " - Warren Buffet
Comments (17):
Dirk Says: So one can buy a single share in a company. I didn't know that | 08.6.2007 |
Jaden Says: Until this article I too believed the stock market is a place for the really big guys like Donald trump and Warren Buffet thanks for clearing that one up | 08.6.2007 |
Agatha Says: I hope you will write more on investing because I don't know much about stock markets or investing there | 08.6.2007 |
Fischer Says: I have been looking at investing in stocks for a while now. I haven't done it yet so I can't say much but thanks for the info | 08.6.2007 |
Jim Says: Stock markets are a whole different ball game. Out of interest Kevin do you have money on the stock markets? | 08.6.2007 |
Nathan Says: Great post Kev. Jim isn't that a personal questional? | 08.6.2007 |
Scott Says: I think its a relevant question. Kev wrote this post to give us advice and if I'm going to take his advice on stock markets I'd like to know if he actually has any stocks too | 08.6.2007 |
Inez Says: Kevin's advice is good and it is practical I don't think he would advise us on things he doesn't do or doesn't know about | 08.6.2007 |
George Says: Guys if the man takes time out of his schedule to write this I think he knows what he's talking about | 08.6.2007 |
Tracey Says: Thanks for the post Kev | 08.6.2007 |
Jim Says: Perhaps my question was misunderstood. I am not questioning his what he knows or what he does it is just a matter of interest that's all | 08.6.2007 |
Kevin Says: No sweat Jim. Yes I have stocks on stock markets both here and abroad | 08.6.2007 |
Bob Says: Interesting post this one I didn't know you are allowed to buy just one share | 08.6.2007 |
Douglas Says: So definately investing in stocks is a long term affair thanks for making that one clear | 08.6.2007 |
Alice Says: I hope to read more on stock markets hopefully you will write more posts | 08.6.2007 |
Dietrich Says: So which types of stocks do you find good in your experience Kevin? | 08.6.2007 |
Kevin Says: Dietrich to answer your question I've found that on emerging markets the mining and raw materials, base metals have proved stronger than others but locally I invest more in financial stocks | 08.6.2007 |
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