Today you can learn to invest in the stock market from a zero or almost zero knowledge, we will present below one of the ways of investing in the stock market.
To begin with, the good thing about investing in the stock market at this time is that now something called volatility goes away more often, that is, stock and price levels go up and down steadily, where it’s hard to set a high point and a low point, and that’s what’s known as market volatility.
This is a rather interesting concept and to consider to invest in the stock market, as many opportunities arise because the market tends to be very irrational.
But What Is the Stock Market?
The stock exchange or stock market, is like any other market, only in this one share are traded, which in turn are part of a company, with which when you buy shares of a company you become the owner or owner of a part of that company. Of course, this is going to depend on how many shares you buy of a company, you would become a minority shareholder, majority or totalitarian, being the latter owner of the company.
Business Investment Method
This is one of the most used methods today, because it is a question of acquiring shares at a modest price and then selling it for a higher value and generating a profit from this principle, consistently. Even sometimes not selling after the shares are acquired, to collect the shares in a certain way and waiting a little in time for them to be revalued.
On the other hand, that strategy of collection of shares, can be one of the ones that can produce more profits over time, an example of this is one of the richest men in the world and it is Warren buffett, because he uses this strategy of collection of shares, as some of his possessions are shares of the Coca-Cola company, with which he has been more than 25 years, since it has benefited him substantially.
As a theoretical fact we must take into account that most companies in the United States double their sales every 8 years, this means that, if the investments are made in a range within the 500 largest companies in the United States, you can expect to double the money every 8 or 10 years, that is to say it is a yield of8 to 10 percent per year, is what on average can generate investments in the stock market.
Although it should be noted that the best investors such as the aforementioned, generate approximately 20, 30 and up to 40 percent annually and even more interesting keep it over time.
Ways To Make Money on The Stock Market
- Through dividends: when a company has profits, it tends to distribute dividends to investors, this is done by some companies, monthly, every 6 months or even every 12 months. Companies cancel between 1 and 3 percent at the share price.
- Capital gain: this consists of buying cheap shares and selling them above the purchased price, this is one of the main ways to earn more income in the stock market.