Learn to invest in the stock market of Estates Agone is not an impossible mission. In fact, these investments have become completely dynamic, and for this reason it is now easier to invest in companies such as Microsoft,Google either Manzana from home and even with your cell phone.
Studying the US stock market can be revealing. In addition, with this type of investment you can diversify your portfolio and boost your assets significantly.
Today, you don’t need to be a financial expert to buy or sell stocks and earn a profit. So read this article to the end to learn how to invest in the US stock market.
What is the United States Stock Exchange?
before explaining how to invest in d bage United States Securities you need to understand its concept well.
In essence, the stock market is a place of exchange. Therefore, investors come to him to buy and sell shares of those companies that are listed on the stock market.
Said market is regulated and controlled by a Stock Exchangewhich in the case of the United States, is made up of the New York Stock Exchange and the Nasdaq Stock Exchange.
So the total value of the stock market in this country fluctuates daily, depending on the volume of buying and selling shares.
It is important to note that the New York Stock Exchange (NYSE), for its acronym in English, is the largest stock market in the world (in relation to its monetary volume).
The objective of the exchange is to execute the purchase and sale order of the shares in a safe and reliable manner. In addition, he makes sure to locate other companies who want to participate with his property, as well as citizens who want to invest their money.
How to invest in the US Stock Market
Currently it is very simple Invest in the US Stock Marketno matter what nationality you have.
However, it is important that you follow these tips so that said investment of money is successful and you do not take unnecessary risks. These are the steps to follow to move in the right direction:
1. Estimate your heritage
A person’s assets are made up of all their possessions, money and valuables.
Before investing in the United States Stock Market You need to calculate your assets and determine the amount of money you can invest in it.
You cannot forget that all investments carry risk (and the stock market is no exception). By Therefore, it is not advisable to risk more than necessary just to satisfy your investment desires.
In other words, you can’t put the money or assets you need to survive at risk, or you could be in serious trouble.
Investors generally invest a percentage of their liquid capital, or some money they have in cash. In any case, the ideal is that you invest some excess money, or that you can actually lose (without incurring debt).
That is why it is so important to have multiple sources of income, to diversify and have the ability to invest without taking unnecessary risks.
2. Develop an investment plan
Developing an investment plan will help you act with intelligence and strategy. In turn, you need to define profitability goals to avoid possible losses.
You must consider numerous factors in such a plan, including the possible recessions that the Stock Market could suffer if it collapses.
If that happens, you will perceive less liquidity in the long term, and your stock market investment it will no longer be as profitable as at the beginning.
Investors who have an investment plan, and return targets, feel more connected to the process, understand the market better, and are prepared to withdraw their profits at the right time.
So your job online will not only consist of investing money in the stock market, but also of protecting your capital at all times.
3. Identify your investment amount
Since 2020 it is possible to invest in the Stock Market of EUnited States with very little money. In some cases you can do it with as little as $1 dollar.
However, most of the platforms that allow you to invest online have a minimum investment amount of $5 dollars.
If you are going to make investments online you will have to have the support of a brokersince you cannot close these types of operations on your own.
One of the most solid and reliable on the market is Robin Hood, since it allows you to make investments in the US stock market from your own smartphone.
Through its app you can invest from $1 dollar, and the best thing is that it is ideal for the most novice investors. (It is very friendly, intuitive and easy to use).
4. Research each company before investing
This process is known as “due diligence” and consists of reviewing the accounting books of the company, specifically those of previous years.
It also involves making a fundamental analysis to visualize the historical behavior of the prices of its shares.
Remember that fundamental analysis determines the intrinsic value of a stock. That is, it determines what it is really worth based on certain financial and economic data.
Before buying the shares of a certain company you should follow these recommendations and review the following financial indicators:
- Read your earnings reports (starting with the annual report). Then you should review the most recent quarterly report.
- Analyze your income statement, balance sheet, and cash flow statement.
Once you are clear about the current financial status of the company, you can decide whether or not to buy shares.
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5. Do a stock search
This process is not easy, much less fast. But a good way to start if you’re a novice investor is to make a list of the companies where you spend money most often.
Do you make recurring purchases in applenike either walmaryou? Asking yourself this question might clear things up a bit. But the truth is that investments cannot be made blindly, much less with such elementary data.
This means that you will need to spend time reviewing special reports, such as those issued by more experienced investors.
You will also get valuable and up-to-date information on the action pages, and therefore cannot be overlooked.
Instead, you should use that data to calculate the “equity”, or the company’s own resources, so that you know exactly what you are getting into.
Ideal financial characteristics:
These are the ideal financial characteristics that a company should have if you are thinking of buying shares:
- Your earnings must be stable, or failing that, they must have a reduced annual fluctuation.
- Returns on capital must be healthy and consistent.
- Your dividend payments should grow steadily and annually.
In turn, it is necessary that you evaluate certain parameters to define if it is worth investing in a certain company, such as:
- Big profit margins.
- Return on investment in five years.
- Three times higher interest coverage.
6. Buy the shares
invest in the United States Stock Exchange It can bring you great benefits, but first you must evaluate if the shares in which you will invest have an attractive price.
A stock is cheap, or at a good price, when it meets the following metrics or conditions:
- Its price/earnings ratio is less than 15x (the market average).
- Your dividends pay more than 3%
- The price/book value ratio is less than 2x.
When you have this clear information at hand, it will be time to choose a broker or Investment fund.
You must make sure that it is registered in the Financial Industry Regulatory Authority and that its record is easily demonstrable. Specifically, the broker will carry out all investment transactions on your behalf, in exchange for a certain commission.
Currently, there are many broker platforms that facilitate transactions, and that are also reliable.
After opening your account they will begin to make investments either online or through phone calls. Of course, you will need to load the funds into your account before placing purchase orders and putting your investments into operation.
At this point, before buying individual shares, the invitation is that you review how index funds work, and in this way you will not take the risk of choosing individual shares, but will invest in sectors, industries or world economies.
Platforms to start investing online
The United States stock market is one of the largest in the world. For this reason, there are many online investment platforms that you should keep in mind.
Some of the big brokers that operate in the US market successfully. We are talking about:
- Coinbase (Cryptocurrencies)
- Robin Hood
- Kraken
- Poloniex
- BisonTrade
- IG Markets
- Interactive Brokers
- Fidelity Investments
- You Invest (JP Morgan)
Importance of training in terms of investment
There are people who do not feel prepared to make investments on their own, due to lack of knowledge of the market, or because they are beginners in terms of investment.
In fact, they feel more comfortable using the services of a financial adviser. But you must be clear that they manage their rates and that not everyone can afford them.
Therefore, the most advisable thing is that you train and prepare yourself in the subject. Although you do not need a professional degree in Finance, you do need to know how to buy or sell shares on the stock market.
Likewise, it is essential that you understand what a broker is and what is the role it plays within the stock market.
You can start with the basics, that is, knowing a method to invest money in the stock market through:
Purchase of securities
They can be actions, or a Listed Investment Fund (ETF)
How do they work? You buy at a certain price, and when the stock goes up in value you sell it.
The ETFs They allow you to diversify your investment portfolio and combine the actions of several companies. It is made up of various assets that are listed on the stock market, such as futures, bonds, stocks, etc.
In essence, its profitability will be subject to the behavior of the prices of the assets that comprise it.
dividends
dividends are equal to the profits that a company decides to distribute among its shareholders.
For the latter, they function as a kind of income and can be collected in cash, or through the issuance of new shares.
According findCashare used by companies to return capital to their shareholders on a regular and consistent basis.
In short, the more prepared you are in terms of investments, the easier it will be for you to manage your money or invest it in shares.
Invest in the Stock Market strategically
Invest in the stock market from EastThe United States can be very profitable; As long as you do it strategically.
You can buy stocks and take advantage of one of the most significant stock markets on the planet, but you should still keep in mind that every investment carries risk.
Therefore, you must cultivate your financial intelligence, along with advice from experts in the field so as not to risk more than necessary.
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