How Newcomers Can Begin Learning About The Stock Market

Investing 101 for beginners

It’s 2022 and you’ve not started investing yet.

You’ve missed out on the 100% rebound since the Coronavirus pandemic in late 2019.

Your “stock guru” friend, which is a non-professional financial advisor, is giving you “investing advice” on the next big stock that can triple your capital.

As a result of your ignorance about the stock market and the fear of missing out (also known as FOMO), you decided to make the big move to finally venture into the world of the stock market.

In the seemingly complex world of the stock market, you get confused about where to even begin.

This is where I come into the picture.

Having invested since late 2020, I’m still relatively new to the stock market if you were to compare me to Warren Buffett — who, by the way, started investing when he was 11 years old! What were you doing at 11 years old? I was probably still playing catch with my friends, not giving a single care about the rest of the world besides the fun I’m about to have.

Hence, I still remember my initial experience with navigating my way through the intricacies of the stock market. In retrospect, there were a lot of things that could have been done better. My time in investing thus far has been full of ups and downs. But I’m glad about that experience. I feel like I’ve invested for 10 years as a result — that’s a stretch, but you get the point.

Time is of the essence behind great investing. Therefore, it takes one to continuously learn the crafts of investing. This is my best advice for beginners, who can’t wait to dip their feet into the pool of wealth that the stock market can provide, to go about learning investing.

Biggest misconception: Read the “Intelligent Investor”

Growing up in an academic-based educational system, I’ve grown inclined to textbooks and workbooks for my learning.

Hence, I first started to learn about investing by searching, “Best investing books to read”, on Google.

I managed to download the E-book of “The Intelligent Investor” and proceeded to dedicate time to read every single page of the book — I’m personally not a big reader myself but I paid more attention to the book as 1) it was the most popular investing book, 2) I wanted to learn about investing in the stock market as soon as possible.

Few pages in.

I was stumped.

Stupified by the various economic linguistics within the book, I got frustrated and quit reading it.

Initially, I thought to myself,

“Man… I really lack the discipline and determination to finish the book. That can’t be the way if I want to learn about investing as soon as possible.”

“I need to re-read the book, research any terms I do not understand, and finish the book.”

That method worked. For about a week.

During that week, I find myself feeling dumbfounded and not understanding what I literally read in the book about five sentences ago.

I thought to myself,

“I’m done with investing. This is too hard.”

But winners never quit. Hence, I pursue another route instead.

Investopedia — the holy grail of investing wisdom, or basically the “Wikipedia” of any terminology related to the financial industry.

One of the first financial instruments talked about in “The Intelligent Investor” is bonds.

Hence, I bought myself a pen and notebook and studied all about it on Investopedia.

ah, the clarity I’ve sought has crystallized at last.

Lesson learned: Don’t start with books. Begin researching financial terms you aren’t familiar with on Investopedia and everything will piece itself together.

The Educational Side Of Youtube

What comes to mind when you think about Youtube?

Clips on silly challenges, slimes, and more things pertaining to one’s entertainment.

It didn’t strike me then.

But Youtube is truly an outstanding medium for education!

Forget reading lines of words when learning about a topic, when you can learn through a video. Research has found that 65 percent of the general population are visual learners— Youtube is exactly that.

Who can you watch for investing advice on Youtube?

I recommend beginners to watch the following stock gurus on Youtube:

• Graham Stephan (Does informative breakdown on certain market events and great for investing wisdom overall)
• Andrei Jikh (Has great advice for wise investing)
• Meet Kevin (For up-to-date events)
• ThePlainBagel***(Exceptionally useful for learning about past stock events, stock-related terminologies, etc)

Try watching them for yourselves!

Start Investing With a Demo Account

A demo account is a virtual trading account that helps beginners dip their feet and have the sensation of being involved with the financial market.

It is also crucial for beginners to utilize the demo account that their brokers provide to have a feel for the user interface of the broker.

In a demo account, you are usually given a lump sum, which you then proceed to invest in the stock market with that sum of money.

It provides beginners with the knowledge and experience in the stock market before actually being involved with their own money.

Upsides to this:

• Risk-free as you are not trading with your real money
• Learn the procedures behind setting up an account, taking the different types of orders (limit orders, market orders, etc)
• Gain experience in the market

However, there are downsides to using a demo account as well:

• The idea of being risk-free incentivizes injudicious and reckless investing
• Does not feel “real”, hence investors aren’t likely to stay the course with a demo account to reap its benefits

While I do agree with the downsides to using a demo account, I still think it is crucial for investors to begin with it; whether or not they continue using it for a prolonged period depends on them.

What beginners fail to appreciate about a demo account is the first-hand experience it provides for the user.

Not only do you get how your broker functions, but you also get the simulated experience of watching your invested sum go through ups and downs.

It is an experience like never before.

Hence, if you’re a beginner who wants to take a shot at the stock market, definitely try out a demo account first!

My “Pep talk” for beginners

Okay, I know you are probably feeling anxious to begin already.

I hate to halt you but what I’m about to say is important to your investing endeavors.

Always bear in mind.

Think of the long term. Not the short term. When it comes to investing, time is your biggest advantage.

Many beginners, like you, wants to “get rich quick” — who doesn’t?

But it is simply a toxic trait to have when investing.

Think of investing like the homecooked stew which your Grandmother cooks.

Just like how your grandmother takes time to prepare the ingredients beforehand, you’ll need to do your research on the business in which you are planning to invest.

After you’ve done your due diligence, you invest your sum, be patient and wait it out — like your grandmother when cooking your stew over low heat to maximize and bring out the flavors of each ingredient into the warm, comforting, and delicate concoction.

Soon enough, your investments will pay off handsomely in the form of compounded returns!

Hope you find this article useful! Do leave questions in the comments if you have any regarding investing! I’ll try my best to reply :)

If you enjoy reading stories like these and want to support me as a writer, consider signing up to become a Medium member. It’s $5 a month, giving you unlimited access to stories on Medium. If you sign up using my link, I’ll earn a small commission.