Investing doesn’t have to be like a life or death situation, in fact it can be used as a steady starting point when distributing your wealth.
Starting as a young teenager, my grandfather was a financial advisor. I’ve always been a pretty curious person so I would ask him questions about his job and what he did. He tried to explain the basics of the market and investing which led to me 5 years later now using that info to invest and to teach you the same.
The Stock Market
The market may be one of the most volatile things in the economic region, but that doesn’t mean long term it can’t be used as a tool to bring in stable income.
Stocks are just pieces of a company that decided to trade/share it privately or publicly depending on their goals. The stock market is well like a (now) virtual “market” that depicts the actions of those stocks as well as the performance, price, and other factors that would go with analyzing a company.
Now you can use the market to see how the economy is doing. Looking at big indexes, they track the big deal companies stock like Amazon, like NASDQ or S&P500 you can see how the market might be performing as a whole.
Typically ups and downs on a daily basis can look a whole lot more volatile and scary than in reality. Instead of looking at the last week or month, look at their entire life as a company. Is there a obvious steady growth? Did they grow for a few years but then dropped in 2008 and haven’t recovered since? This information can help you as an investor know how well the stock is doing.
This is just information from my perspective and experience, as a young person you should talk to others more experienced in this area as well as extensive research on terms, meanings, and other information to decide how you will invest.
Strategies For Investing
Investing is kinda like playing chess, you have to think 4 moves ahead and hope that you’re opponent (stock market) doesn’t do something you didn’t predict. Except that the stock market could care less if you lost thousands of dollars, and you’ll probably never learn really how the market will act.
That may seem a little disheartening to hear but it’s true. This doesn’t mean you can’t be successful investing in the stock market. Using a mix of investing strategies and knowledge you can make choices that actually are profitable long term.
Let’s go over some just 3 common ones. (Disclosure I will be using my own nicknames and personal experience to depict each strategy.)
Strategy 1.) The Slow and Steady Snail
Don’t get all down about the name as it seems pretty boring, but it can reap large sums. This strategy includes investing in index funds or ETFS (which are a bit more different than index funds.) These track different indexes (NASDAQ for example) and different sectors (Cybersecurity is one.)
The difference between ETFS and index funds is that the ETFS are traded in trading hours and index funds are traded at the end price of that trading day. For example if I were to buy CIBR at 10:30 EST it will go through right there, but if you bought FCNTX you would have to wait until it closes and it will go through later.
Basics of this strategy is that you can invest in let’s say FCNTX, it follows the S&P500 index and is investing capital appreciating companies. It holds multiple types of companies such as Amazon and has a steady yearly return of about 11% or so which is about an average return. So let’s say you invest $200 in FCNTX and then $50 every month. In a year that would accumulate to $800 with a 11% return you’d be up to $888 earning $88 by doing nothing. Doesn’t seem like much but over time and bigger investments it can grow into something much bigger.
Strategy 2.) Wall Street Wannabes
Investing in the market is fun, you get to see your money grow and get adrenaline rushes when a stock soars 150% in a day and continues to go up for a few days after. But what about when it crashes, as the saying goes, what comes up must go down.
Now this is a strategy for a reason, you can make money this way, lots in fact, but then again you may lose lots.
In my opinion the way to go about this is to learn about stocks and how they act to identify trends in stocks so you know when a stock is at the tip of the growth spurt so you don’t lose all your money when you hold for too long. Then you can decide to set money aside in your portfolio to experiment with gambling. Similar to wall street investors only because you try to look for the best stocks ever whilst competing with real wall street investors.
Strategy 3.) The Crypto High
Cryptocurrency has started popping up everywhere. In some countries it’s became a government regulated currency whilst others are banning it from being traded.
Investing in crypto can be risky because of it’s insane volatility. One day it can be up to 50k then the next it’s down to 30k. But there’s different cryptocurrencies like Bitcoin or Ethereum. Each has different set prices and company background. People can make money off of it but you have to be patient and diligent and not get stressed when you may have to cut your losses.
People who invested in this years ago are the few who are now able to successfully make a dependable profit off of it. Unfortunately to invest you must be 18 to but it’s good to learn about everything first anyways.
Investment World
There is way way way way more to stock market investing than this. I’ve just written what I know so you can get started learning what you think would work for you. If you want suggestions on topics to read about I suggest analytical analysis and how news and media can effect a companies stock.
The stock market may seem intimidating but don’t fret, it can be learned and it’s not as scary as it looks.
Financially Independent Adolescents 