10 Tips to Invest in the Stock Market | Investing in Stocks Market

As in any other activity in which we are interested, before entering the stock market, we must inform ourselves about the elements that comprise it, its operation and the community that is part of it; in addition to the laws that regulate it.

The Stock Exchange is a market in which everyone can participate, from executives of the most recognized brokerage houses, to teachers, doctors and basically, anyone who has a little time to manage their investments and patience to see them grow.

Here are some tips that will help you take a first step to invest in the Stock Exchange:

        Sign up your personal finances

Before making any type of investment, it is necessary that you order your personal finances, that is, that you learn to manage your money in a disciplined and constant manner. Make a monthly budget taking into account your income (income) and outflows (expenses) of money to determine the amount you are willing to invest. Also, it is important that before making any investment out all debts that you have contracted, remember that once you start investing your investments will become a new use of money, which previously had not contemplated.

2. Seek advice

To form an investment portfolio it is necessary that you know the mechanisms with which the stock market works. There are several financial institutions, such as banks and brokerage houses, which have advisors, who will help you to know the risks to which you are exposed if you wish to invest, as well as the estimated time necessary for your investments to yield the fruits you want. . In addition they will advise you to place your money in the best investments. Remember that part of the money you allocate to investments will go to the advisory services you use.

3. Know your profile as an investor

Depending on the time you want to allocate to the management of your investments and the risk you want to assume at the time of investing, you must decide if you are a passive investor, with which you would have to dedicate 4 or 5 hours a month to manage your portfolio, besides your risk profile would be low, with what you should invest in funds. If you are an active investor, you would have to spend at least 6 hours a week managing your assets, plus your risk profile would be high, with what you could invest in stocks and currencies.

4. Define your investment objectives

After you have ordered your personal finances and have determined your investor profile, you need to know what you want to invest in the Stock Exchange, because if you lack investment objectives, such as buying a house, car or guarantee resources for your retirement, the decisions you should make when making transactions in the market will not be based on what you want to achieve with the money invested, but on the luck you think you have when making your investments and this could take you away from the profits . With an objective in mind, you will avoid making decisions lightly and you will know how to retire when you have to do so in order to set new goals with new investments.

5. Do not invest all your assets

Even if you have decided that your risk profile at the time of investing is high, that is, that you are able to tolerate fluctuations in the prices of the shares you have acquired, it is not advisable that you allocate all your assets to the investment in the Stock Exchange. Values. This is because such fluctuations, as well as certain investment schemes, will not allow you to have the money invested in case you have an emergency or if you have scheduled an important expense. The best is to allocate a fixed amount with clear objectives.

6. Avoid falling into the anchoring

While it is necessary to have a financial advisor to resolve all your doubts about how the stock market incursion works, it is important that you consider asking for a second or third opinion when determining the stocks or securities you wish to sell and buy, this in order not to fall into the so-called anchoring (anchoring), a problem by which you run the risk of not taking into account the context in which you are making your investment by anchoring your attention in a particular action or moment, with which your results may not be as expected. Consult sources of economic information, such as magazines and specialized newspapers, to know the opinions of experts in the financial field.

7. Invest through authorized intermediaries

The only stockbrokers authorized to buy and sell shares are brokerage firms. There are a lot of options to enter the market, you must compare what suits your goals and your investor profile and verify the qualifications awarded by national and international consultants for the portfolio where you want to invest.

8. Diversify

Not putting all the eggs in one basket or not gambling all in one letter are expressions that summarize perfectly what it means to diversify our investment portfolio. You can invest in different instruments within the stock market, such as shares of foreign companies, government debt or companies listed in international indexes; likewise, you can choose the purchase of shares of different sectors and with a different size, to prevent losses caused by the fall of a specific sector or by the instability of the national market.

9. Learn when to buy and when to sell

The majority of investments in the Stock Exchange must be made in the medium or long terms. However, one can buy an action on a Monday and sell it on Friday, which would be a very short term investment and very high risk. Knowing the historical performance of an action that you have previously chosen will help you to know what the trend of its price could be in future days, and thus determine if it suits you to buy or sell.

10. Continuously analyze the behavior of your investments

Keep a journal of the purchase and sale of shares, as well as the reasons to buy and sell, will help you to know your mistakes and successes, which will make it easier to develop a long-term investment strategy. Studying your own decisions will help you to know more in depth your profile as an investor and your risk tolerance. Likewise, analyzing the behavior of your investments will give you, with patience and discipline, the ability to take advantage of different opportunities with greater effectiveness.
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