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Why it Matters to Invest in Stock Market

Investing in stock market can help you achieve the following goals:

  • Have dependable source of passive income

  • Create generational wealth

  • Give you freedom from having to work for someone

  • Meet life goals and general satisfaction

Stock market matters! It is where you can buy and sell shares of almost any major company you can think of. It is where trillions of dollars change hands frequently. The reason you should pay more attention to it is because many individuals, investment companies, retirement schemes, wealth management entities, life insurance companies – and the likes – have built tremendous wealth from. Think about it; the current total market capitalization of the U.S. stock market is about $49 trillion! This is enormous wealth. You will be doing yourself disservice if you are not scooping some of this wealth!

It is therefore a good idea to know how it works, and how you can use it to your advantage.

Numbers Don't Lie

Do you know who Warren Buffet is? If you do not know, I challenge you to find out who he is, and how he built his wealth from stock investing.

Numbers don’t lie! Look at Table 1 below. Ten years ago, one Tesla share traded at just about $5.32. Right now, same share trades at $727. That is a whopping 13,565% increase! For every $5.32 dollars you would have invested then, by now you will have made about $721. Again, Microsoft was roughly $20 then, but now is $254 - an increase of 1,183%.

Looking at the table above, if in 2010 you had randomly bought the stocks in this list and spending $687, right now you’d have made $7,212.

You have seen the trend for yourself. These are just a few examples from many similar cases. From this sample, and looking at all other historical stock prices, we can confidently hypothesize that, generally, stock prices go up over time. My question to you therefore is: What are you doing with this powerful knowledge?

Now that we have seen the potential opportunities offered by stock market, let us go through useful steps needed to buy your first stocks.

Step by Step Guide on How to Trade Stocks

Step 1:

Learn How to Trade Stocks

Determine how much you want to invest per month, then split the amount into weekly or daily goals. For example, if your goal is to invest $400 per month, split it into $100 per week or $20 per day, then consistently invest (in whatever stocks you’d like) until you meet the percentage threshold you set for take profit. Once any of your stocks meets your threshold, sell, and start over again, noting to increase the quantity of each trade in tandem with the percentage profit you gained prior to selling.

Step 2:

Determine which Stocks to Trade.

  • Easiest way to tell is to look around. What products do you use? Where do you shop? What's in your house, car, office? Almost everything you interact with has a company listed in the stock market.

  • Raise your awareness to the products and services you interact with daily, and proactively seek/research information about them.

  • Regularly read financial news. Here are useful sites to start with: Yahoo Finance, Google Finance.

Step 3:

Find a Stockbroker and open an Account

There are many stockbrokers out there, but I recommend Robinhood because their account features include among others:

  • No fees

  • Access to trade fractional shares and cryptocurrency

  • Instant deposit

  • High-quality app trading platform suited for beginner investors.

Step 4:

Continue trading, noting to adjust your trading strategies as your goals change. 


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