8 minutes 19 seconds
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In today's video I'm going to teach you how to invest in stocks. So today's video is a stock market for beginners video and I'm going to explain to you what are stocks, how to invest in stocks, how people get wealthy by investing in the stock market, and what stocks are best for beginners. So let's get started. I want you to know that the stock market is very simple. So let me explain to you what stocks really are.
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So let's just say that you own a business and so you're a business owner and let's say that you want to raise a lot of money for your business to grow and expand. So what do you
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need to do? You need to find investors and a great place to find investors is in the stock market. Now in order for you to raise a lot of money for your company, You need to sell a portion of your ownership in your company to investors. And that's what stocks are. Stocks are just units of ownership in a company.
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So if you buy stock in Apple or Microsoft or Tesla, you are an owner of the company. So you probably own a very small piece of the company but you are still technically an owner. Therefore 1 person does not own Apple or Microsoft or Tesla. So there are thousands of people that own stock in those companies so those companies have thousands of owners, which are the stockholders. Now let me tell you how to invest in stocks.
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So the stock market is a big marketplace where you go to buy and sell stocks. To participate in the stock market, you need an online brokerage account. So there are a lot of online brokerage accounts to choose from. I'm going to leave a link down below to some online brokerage accounts that are offering sign-up bonuses with 0 fees and there's no catch. It will cost you nothing.
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And some of these sign up bonuses, they can be substantial, so please be sure to check them out. So you open up an account, and then you transfer money from your bank account to your brokerage account, and then you're going to have money in your brokerage account, and then you're going to be ready to buy stocks. So you want to buy stocks in good companies. That's because if a company does well, then the value of the company increases. If the value of the company increases, then the price of your stock goes up.
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And in many cases, if a company is making a lot of profits, the company will take those profits and pay a dividend to whoever owns the stock. So you don't have to do anything to collect a dividend, it just gets deposited into your accounts which is pretty awesome. So this is passive income in its truest form. Now if you want to sell your stocks it's very easy. So you may want to sell your stocks for whatever reason such as you just want to cash out, maybe you don't like the company anymore, maybe you want to sell your stock to have money to buy a different stock.
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So you're free to do as you please and again this is all free, no fees, 0 commissions. So when you sell your stocks you'll have money in your brokerage accounts because again you sold your stocks and whenever you want you can transfer that money back to your bank accounts or you can let that money just sit there. Some brokerage accounts they'll pay you interest on the money sitting in your accounts or you can use that money to buy stocks you know whatever you want. Now I want you to know that many people get wealthy in the stock markets and there's not just 1 way to do it. I'm gonna tell you what most people do and you can try to see which style is most appealing to you.
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Buy and hold, dividend investor, speculator, trader, and let me explain these styles to you. Buy and hold. Some people just buy stocks and they just hold on to them for a very long time. We're talking about years, even decades. Some people, They'll even hold on to their stocks until they die and they'll put it in their will.
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So this is a set it and forget it approach. Traders. Some people in the stock market will try to buy and sell, buy and sell frequently and make some money. So these people are known as traders. Traders are not interested in holding a stock for the long run and watching the company grow.
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So I would recommend that beginners in the stock market, so if you're a beginner please refrain from trading with a large amount of money, I would recommend that you get some practice in first. But it's true, many professionals get rich by trading, but that comes with experience. Speculators. Some people buy smaller, riskier stocks that have a lot of potential and could skyrocket in price. So these are speculators.
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I'm not saying that in a good way or a bad way. People speculated on Tesla early on and made a lot of money. So you could say the same thing for Amazon or Walmart and so many other stocks. But there's other people that speculated on stocks and lost a lot of money. So if you're going to speculate, don't invest too heavily in 1 stock and do not fall in love with a stock.
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Your emotions can cloud your judgment. Dividend Investors. Some people buy stocks primarily for the dividends. Many investors take their dividends and reinvest them to get more dividends and your wealth accumulates over time. This is a great way to build your passive income.
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You can set your account to reinvest your dividends automatically. It's called a DRIP, Dividend Reinvestment Program. I am personally a big fan of dividend investing because you literally get paid for doing nothing. So if you're dividend investing, your money is making you money. So you should know from the get-go which style is most appealing to you.
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And it could be more than 1. It could be a combination. But there's no 1 right answer. There's no 1 right method. So whichever path you take, you should understand the pros and cons of that method or that style.
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Now let me tell you what stocks I think are best for beginners. There will be so many stocks to choose from. Small companies, big companies, companies in different sectors, energy, technology, real estate, retail, banking, pharmaceuticals, etc. There will be companies that focus their sales in the US. There will be multinational companies.
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There are just so many options. I would suggest that as a stock market beginner, you invest in bigger and more stable companies. The reason why I'm saying this is because of risk and reward. If you invest in a smaller no-name company, there's a higher probability that you can lose a lot of money. As a beginner, you should get a feel for the stock market, take it easy, and just learn.
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Once you get more experience and knowledge, then you can slowly move out of your comfort zone into stocks that offer more risk and reward. If you don't want to take this advice and you want to jump straight into risky stocks, then I beg you, please do so with a smaller amount of money. Please take my advice, the stock market is not a get rich quick scheme. In the stock market, you want to be an investor, you do not want to be a gambler. And I want to see you make money.
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As a beginner, it is better for you to make a little bit of money than to lose money. So I would recommend sticking with safer stocks to start and learning little by little. Slow and steady wins the race and it's a marathon. And just so you know, if you want to be very safe and diversify, then you can always buy index funds. An index fund is a collection of stocks.
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It's like a big basket of stocks where you get diversification. So it's a way for you to buy a little of almost everything which decreases your risk. And I want to say this because this is so important. When you're looking for stocks to buy, always do your own research. I would recommend that you take the approach as if you're buying a real business.
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Investigate the business. What do they do? How do they make money? Who are their competitors? How do they compare to their competitors?
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Why do you believe this company has a bright future? Will there be any disruptive circumstances in their industry? Does their stock price seem overvalued, undervalued, fairly valued? So please do your due diligence. So listen, I hope this has been helpful.
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If you want to see what I'm buying and you want exclusive educational content on the stock market, then I encourage you to please check out our Patreon website. I'm gonna leave a link down below. Thank you for all the support. I appreciate it so much and wish you a very nice day.
Omnivision Solutions Ltd