How to Invest in the Stock Market for Beginners

so what we are going to be talking about is how to invest in the stock market for beginners I've invested a lot of my money in fact I've him fast invested most of my money in the stock market over the past four years because I am 22 and I am a pretty good investor I've only lost on one deal and I'll explain what that deal was and why I had to lose money on it but so yeah we're going to talk about some basic principles that I wish I knew when I started out and well I kind of did know but like when I was starting to gather my research I was I was researching when I was 16 and then I eventually was able to invest my was 18 so I kind of knew what I was doing when I started but many was some very very basic principles so I'd like to start out with a quote from Warren Buffett and it's something it's like paraphrasing I'm paraphrasing but he says something along the lines of them invest in the stock market as if it wouldn't reopen for ten years and so that's the perspective I take invest in companies that are going to be good in the long run no matter what a lot of people actually we're going to be getting to all this so just invest in very good safe companies and you're going to be just fine so again what I will say here is bye-bye safe stocks and what do I mean by safe I'll explain so buy safe stocks well mostly safe buy safe stocks and my recommendation that I tell all of my friends who I've helped start investing is at least 80% of your stock investment should be in some sort of safe stock that you know is not going to go to zero at any point in the next 10 years and so what companies would that be well like what stocks very first example is the greatest stock of maybe all-time in my mind is a coca-cola coca-cola because they increase their dividend per they increase their dividend every single year essentially and the stock is always essentially gone up it's gone it's go through cycles but it's you know it all it's gone up over the past 100 years pretty steadily so stocks like coca-cola Canadian banks I know in the USA banks aren't too safe but certain banks are good ETF funds and so I'll explain what those are right now some ETF so what ETFs are is they're it's a collection of of stocks I should say so let's just say you want to invest in I don't know in reenter the real estate market through stocks okay and so instead of investing in one company you can invest in an ETF which stands for an exchange-traded fund essentially you're betting that the real estate market will do well because the ETF is invested in all of the real estate market and so that's pretty much more than ETF is so if you're comfortable like don't invest too much in the tech industry because that's very risky but let's just say you want to invest in the banking in financial industry go and buy in financial ETF so that all of your eggs aren't in one stock in one basket and yeah so those are just some examples by safe stocks don't buy too many risk you don't buy okay we'll get to a lot of these well I have a lot of things I want to talk about so buy mostly safe stocks yeah and so the coca-cola stuff like that I stay away from speculation like stash I should write that stay away from speculation in the first place I'll explain what that is from what's called spec spec tech and we'll just say commodities I guess calm okay that stands for commodities to calm okay so stay away from those if when you're starting out if you're unless you're on Wall Street just don't buy these for the most part so a lot of people lose a lot of money betting on the tech industry honest any speculation so what speculation is is uh you're essentially it's a it's a stock without a dividend in the first places and I guess I'll explain what a dividend is but you're essentially putting all your eggs in one basket that the value of the stock stock will go up within a day or a week and if you don't make money on that you can lose a lot of money a lot of people do so don't do don't do speculation always invest in the long term or at least middle like two to five years or five plus years or maybe even six months depends but don't do speculation so don't invest for the short term don't invest into a lot of tech companies unless they're Apple that pay a dividend and don't uh don't go for too many Kamata don't go for like gold all the time don't go for silver those are cyclical okay those respect those are pretty much speculation stay away from those unless you know what you're doing well you're a beginner if you're watching this okay so again this is this is a dividend so gets dividends and I'll have a second part here and reinvest the dividends okay so a dividend what it is is so a lot of companies they will you invest in a stock let's just say $100 in your stock a lot of companies will pay you a certain percentage for investing in the company so it's a way of driving the value of the stock up it's very smart so what let's just say $100 stock let's just say it's a bank they pay back four percent okay so every year for every stock of the hundred dollar stock you own you're going to be getting back four dollars no matter what so those stocks are usually very very safe well actually hide high dividend stocks are actually not safe usually the middle range like banks that are pretty safe for the most part in Canada at least and so now the greatest power in Finance is compound interest and what do I mean by that so all of this all the dividends you get if you were to reinvest them into other dividend paying stocks it'll increase the overall value of your portfolio and you'll be getting back more dividends every single time you reinvest meaning that so I read a study actually and people who invest in the stock market and reinvest their dividends they can earn over a million dollars more and in their lifetime than the people who get their dividends and spend it on on jewelry or something on random stuff so reinvest your dividends in the long run that's going to be the best thing you can do probably and reinvest your capital gains as well so if you sell a stock for more than you bought it for reinvest that into another stock that's how that's how it should work don't take out all your money and buy a car all right it's dumb that's what a lot of people do ok so what's next on my list I think that's yeah so I said reinvest so this is kind of a basic principle that people do not stick to and for whatever reason oh my god this bothers me so so by when everyone else is selling so why what do I mean by that by when everyone else is selling so usually when people are selling the market is bad or it's predicted to be bad very soon and so usually when people are selling that's when the stock will be at its lowest okay during a recession when everyone's selling to get out to make sure that they don't lose more money what happens is you get people that become very rich during recessions because the stock can only go up from there so here's another thing that I want to talk about so also sell when everyone else is buying too that's another it's vice-versa but here's the if the value of your stock goes down you know within a week of buying it or month of buying it or six months don't sell it under sir under 99.99% of circumstances don't sell when the value of your stock goes down just because you get scared that is the worst thing you can do you're automatically losing money now there are certain cases where you should do that okay they're very very and I'll explain one example that I went through where I had to do that and I had to lose money which ended up working out very well for me so I'm going to give you an example here and it goes along with this next tip here pay attention to the news big big big big big one it can save you a lot of money if you do this okay so I'll tell you my example first let's just see this was 2013 2014 my friend I remember this my friend and university came up to me and he was talk we were talking about some global crisis it was some at the time I was it something going on the I think was Egypt actually it was Egypt's revolution it was around that time and then for whatever reason we got off topic and he brought up the word fracking I never heard this word before fracking so I kept asking about it and he said pretty much the US what they want to do is they want to you know get more oil by using all this complex system and it's going to damage all the lands and stuff but I thought of it too that's going to be horrible but I thought of it as dear god the US is going to increase the supply of oil by a lot in a very short period of time and so the value of oil is going to go down about oil stocks are going to go down I was invested in oil in an oil company at the time it was Canadian it was a station at Alberta was in its name sorry this was a couple years ago was it was it Chiara no might have not been my twin kya kar oil I don't know you can check that it was one of those Alberta oil companies in Canada remember within 24 hours of my friend telling me about this oil fracking and be looking it up I sold all my tire was it cut it was ke arah oil stocks and all my Canadian oil stocks were gone within 24 hours and you know I ended up losing like it was essentially zero it was like 20 bucks on I was invested over a thousand dollars in that which again for most people for a lot of you was like thirty year olds watching this that's not a lot of money for a student that's that's a decent amount for a thousand bucks it wasn't but my largest holding at all but it was a thousand bucks in Cairo and I sold all of it I lost like 20 bucks or fifty bucks or whatever that was and I remember checking the stock that stock price six months later and like I saw this recession coming actually I took a lot of my money out of my Canadian investments because I saw this kind of come in this Canadian recession there's a lot of our economies based off of oil right especially in Alberta and so I sold a lot of my Canadian stocks and and yeah that they ended up going we got hit pretty hard by this we're going through a recession right now America because you're fracking so thanks so I sold all those and it ended up plummeting every all those prices end up plummeting just because my friend told me about this word fracking which I'd never heard before amazing right so just stay up for random random stuff like that pay attention to the other thing too is it's vice-versa I remember one day it was the new iPhone came out this was the one last year or two it was two years ago now Wow was two years ago and everyone was buying all the all my friends pretty much converted from Android or you know whatever the freakin phone they had Samsung to two iPhones like literally within a month for my friends bought the new iPhone and this was in September so I bought the stock so I was like oh god there's like just from what I can see around me their earnings are probably very very high right now and I remember two weeks after I bought that they released their earnings report and the stock increased by like 20 bucks within within weeks span and I ended up buying it for like $85 ish and it was I think it was 85 might have been 80 something around there and it sold it for 131 American it was great each stock each stock I don't know I probably bought a thousand dollars worth of them no I was but yeah it's about a thousand dollars so I ended up making like almost 40 or 50 percent on that investment it was good so pay attention to the news everyone very very important another thing if you're just starting out just keep in mind don't invest less than five hundred dollars at a time so don't invest less than five hundred dollars at a time so this is just simple mathematics actually so the bank or I'm guessing you're investing through your bank right they have fees every time you buy a stock if the fees usually $10 if you're buying domestically and 50 dollars or two hundred dollars worldwide and so if you let's just say you're investing in in a domestic stock and the fee is going to be ten dollars if you're investing $100 you're paying a $10 fee you have to bet that the stock is going to pay you back 10% within a couple years okay to make it that that doesn't happen a lot okay and so I say invest $500 minimum in one stock at a time because it'll limit the amount of I don't know the amount of I'm trying to thing better the amount of increase that the stock has to have to make it pay off for you so if you invest $500 in a $50 stock and the fee is $10 if the stock goes up $1 then you've already made your money back if it goes from 50 to 51 dollars you've already paid the fee off that you had to pay the bank so just something keep in mind and so yeah this is kind of all the basics that I wanted to go through I guess a few more I guess a few more things I should say don't invest all of your money in one stock okay so I just said five hundred dollars at a time you know don't invest everything in one stock try to do five hundred dollars here 500 there 500 there 500 there don't put all of your eggs in one basket that's that's again dumb thing try and invest in as many dividend stocks pay up and yeah just I think these are just kind of the core things that I go through investing do your research too but keep in mind a lot of research on the Internet is BS the only research I use like literally the only research I use is the literally graphs in earnings reports and you know pretty much the statistics you can get from the stock it's step itself not from the company not from speculators not from news agencies but from the physical mathematical numbers that they have on the stock over time so I look at all of the charts and that's that's all you really need I've only had I'm one of those rare investors I've only had one loss and I've had three big gains one of which was in tech systems one of which was in Apple one of which was in Nike and those actually Nike had a lot of my holdings too I'm glad I sold that because I made a lot of money on that one so just keep in mind and don't ya sell when everyone else is buying just keep just do all of this guys do all this and you're going to be fine believed by all of those live by all these tips here so do you guys have any tips leave your tips in the comments I'll kind of want to know what your tips are these are just the ones that I've been able to build since I was 16 and they've they've really helped out a lot so yeah I just leave a comment and let me know what you think subscribe heart hurt me on periscope please I'd like that and yeah I just want to thank you very much for watching these are just my beginner tips and yeah you are all very beautiful people now see you guys next see you guys tomorrow YouTube I'll see you in a better week on periscope thanks for watching everyone

Channel: Jack Chapple

Views: 2,777,433

Rating: 4.8044744 out of 5

Keywords: generation jack, jacksci, how to invest money, how to invest in the stock market for beginners, how to start investing in the stock market, stock market beginner investment strategies, ways to invest in the stock market, ways to start investing in the stock market, how to begin investing in the stock market, first time investing in the stock market, best ways to invest in the stock market, how do i invest in the stock market, stock market investing tips

Id: 0asQOYockjY

Length: 17min 54sec (1074 seconds)

Published: Thu Feb 25 2016