90% of stock investors lost their money in 2022. Earning money in the stock market is not hard, but it takes time. What is the best way to start investing? How much money should you start with? There are many stocks in the market, making the investment decision hard, but do not worry because in this blog you will learn what investing in the stock market means.
Who are you?
To start investing in the stock market, the first thing you must know is who you are according to the stock market: are you the person with big or small cash money, the person who wants to save his salary, or the person who wants to invest his profit that he earned from his shop? Based on who you are, you can plan for your goals and expected income. The most important thing in knowing yourself as an investor is to be real, not fantasy; you cannot make $1 million by investing $1 $.However, there is one thing you must understand: how to differentiate between investing and trading.
What is the difference between investing and treading?
If you think you enjoy winning and avoiding losing, that means you are more of a trader than an investor. Because investing is not about losing or winning, it is about keeping your money safe from the phenomenon called "inflation," where the price changes in daily life, like in the cold store (increasing the milk price), gas station (increasing the gas price), or apartment rental price.
When to buy and when to sell?
After you know who you are and that you are an investor, not a trader, now it is time to make your goal with your investing, and the goal must be when you buy the stock and when to sell it. The old school says to buy stock when it is cheap and sell it when the price is high. That is true, but let's explain it more. First, set your goal income percentage from the stock, and it must be by percentage, not by how much money you get. Percentage is the toll that measures how your investing is going rather than how much you are making.
What is the minimum duration to hold the stock?
Investors are divided into three parts: the first one who takes advantage of the growth of stock prices in the stock market; the other one who takes advantage of the growth of company fund prices; and the third one where the investor takes advantage of the dividend. Investing is a slow process, not like trading, so you must be patient. To calculate the goal of your plan, you can use this equation:
Total income = yearly income % * years of keeping the stock
Let's say you set your goal at 5% yearly for 10 years; the total income will be 50% after 10 years, so as an investor, do not worry about the daily stock price change because your goal is to keep the price for 10 years. Many investors lose their money because they do not stick to their duration plan.
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