Let’s say you have a deposit in a bank, but you are not satisfied with the interest rates, they are too low, and you want to earn more. But you should understand: the higher the opportunity to earn, the higher the probability of losing all the money. If you are aware of the risks and you have free funds, it may be worth mastering investing in securities traded on the stock exchange.
For example, a share is an equity security that indicates ownership. By buying shares in a company, you buy a stake in it (even if it is very small). You can receive income from the purchase and sale of shares or dividends – a part of the company’s profit at the end of a certain period.
A bond is a debt security for which the issuer — the state or the company that issued it – undertakes to pay a certain percentage in the future.
The easiest way for a beginner is to buy securities, and after a certain time to sell at a higher price — and so earn. The main thing to remember is that profit is not blind luck, as in a casino, but the result of well-thought-out actions. Not a game, but a job.
It is not worth investing the last money if you do not have savings and a deposit in the bank. If the bank goes bankrupt, the state will return the money to depositors – within 1.4 million rubles. There is no such insurance on the stock exchange, you can lose everything. Moreover, falls in the value of securities occur much more often than bank failures.
I want to try. Where to start?
The modern exchange is electronic, you can trade via the Internet without getting up from the sofa. But this requires an intermediary – a company that has a license for stock trading. Before you look for it, you should determine a few important things for yourself.
Estimate how much you are willing to invest
Theoretically, you can start with any amount, even with 1000 rubles. But such a volume does not compensate for the commission of the intermediary, nor the time spent on bidding. It is worth starting to invest if you are willing to risk several tens of thousands of rubles. It is better to imagine in advance the situation in which you will lose your money. If you understand that this is not a disaster for your budget, you can try.
Think about how much time you are willing to spend
If you are ready to take training, immerse yourself in the topic, study statistics and stock reports in the morning, follow the charts during the day, you can try trading yourself. Then you will need a broker who will become your intermediary to access the exchange. You will make your own decisions about buying and selling, and the broker will carry out your orders.
If you do not intend to spend a lot of time and effort on investing, then it is better to consider one of the forms of trust management. In such a system, you make a minimum of decisions, entrusting the investment of your money to professionals.
You can conclude an individual contract with a trustee, transfer money to him — and he will decide for you when and which assets to buy and when to sell. His goal is to invest your savings with maximum benefit at the level of risk that you choose.
Another option is to invest in mutual funds (mutual funds). These are ready-made sets of different securities or other assets, for example, shares of Russian mining companies. The management company manages the funds of the mutual fund (buys and sells assets, changes their composition).
You can choose a suitable fund and buy its shares either from the management company itself or through a broker on the stock exchange. If the company invests successfully, the price of shares will rise — and you will make a profit. If it falls— you will suffer losses.
3.Choose a strategy and assets
Decide what you will invest in. Stick to a certain strategy.
What is a strategy?
A strategy is a set of investment parameters that determine your style of behavior on the stock exchange: what assets you trade, how often you sell, what you are guided by when making decisions (for example, whether you watch news that affects the market).
The simplest strategy option — you choose:
the period for which you want to invest;
the maximum amount of losses.
Let’s say the assets are shares of pharmaceutical and chemical companies, the period is 1 year, the amount of losses is 20%. In this case, you immediately sell assets if they have fallen in price by 20%, even if the year has not yet passed.
If you have chosen trust management, then you also need to decide on a strategy. Only in this case you will choose from the offers that are already on the market, or discuss an individual strategy with your manager.
4.Find an intermediary company
When you decide on a strategy, it will be easier to find an intermediary. The most important and paramount thing when choosing a broker, trustee or mutual fund management company is to make sure that they have a license from the Bank of Russia.
If you have chosen to invest independently, you will have to go the following way:
conclude an agreement with a broker;
open and top up a brokerage account;
install a special program for trading;
start buying and selling.
If you have chosen the path of trust management, it will be enough to conclude a contract and transfer the money to a trustee or a mutual fund management company.
Common mistakes: how not to do
You can’t invest everything you have in securities
First, set aside money for life and unforeseen expenses. Create a “safety cushion”: open a bank deposit — and only then start trading on the stock exchange. Invest an amount that you are willing to accept the loss of.
Do not act on chance — go through training
If you decide to trade on the stock exchange yourself, be sure to complete the training. Most brokers conduct courses for novice investors. Trading programs often have a demo mode: you can try your hand at it without the risk of losing money.
Do not give in to emotions
Acting impulsively, you can make a lot of mistakes. A novice investor should not react sharply to the slightest price movement on the stock exchange. But we must act decisively if the price changes significantly. Set the limit of losses that you are willing to bear: for example, if assets have fallen in price by 20%, you need to sell and, as they say on the stock exchange, fix losses. In other words, you are ready to accept the loss of 20% and complete the auction to avoid even greater losses. The desire to wait some more – suddenly “bounce” – will be great, but you do not need to give in to it.
Don’t put all your eggs in one basket
It is better to buy securities of companies from different industries. For example, when oil prices fall, securities of all companies in the oil and gas sector suffer. If you purchase securities of companies in various sectors of the economy, for example, chemical industry, mechanical engineering, telecommunications, this will help you reduce the risk of losing your invested money (or, as financiers say, diversify risks).
Don’t believe promises to earn 500% a day
Only charlatans can guarantee anything on the stock market. And a responsible broker should warn you about the risks. The situation on the stock exchange is changeable, and only you are responsible for the decisions made.