Until a few years ago, investing in the stock market sounded like something distant or not within everyone’s reach. But today the markets have evolved to attract investors. In this post, we tell you how to make money in the stock market, and how to find value and generate profitability.
What does it mean to invest in the stock market?
Investing in the stock market means giving or contributing a certain amount of money for items, services or projects of a company in exchange for receiving rights as a shareholder and, in the long term, receiving economic benefits.
It is key to be clear that investing in the stock market is not a game of chance. It is necessary for a person to have been investing in the stock market for many years, and to have become an expert, to establish a stable source of income through these investments.
Earning money in the stock market involves time to understand the behavior of the stock market and to test various investment strategies . Remember that the stock market is an organization, public or private, that allows negotiation and exchange .
Tips on how to make money in the stock market
Investments are a whole world, but these are some tips that can make your path easier if you are wondering how to make money in the stock market. But first, we would like to emphasize that if you are a beginner you must take into account the risks involved. For example, keep in mind that:
- The stock market is not a gambling club. Otherwise, you will end up losing money.
- Make your movements in the stock market with prior knowledge. Otherwise, you will be investing with your eyes closed and could make decisions on impulse.
- Specialize in the world of investments. Little by little you will become a real broker.
Anticipate the news and play it safe
As we have already mentioned, investing in the stock market is not a random method in which the share price rises one day and falls another day, for no reason. The price is a function of the law of supply and demand, which is the real reason why there is movement in the stock market.
Our best advice is that you learn to read stock market prices and do not wait for the news, as sometimes it is late. Don’t invest blindly either, that is, always keep the following elements in mind:
- What to buy?
- When to invest or buy?
- How much to buy?
- How much to sell?
This method requires patience and a bit of strategy, so don’t expect to make money quickly. That is, the profitability of your money can be reflected in the long term.
Think long term
Make time your best ally. Think about what you want or how you see yourself in 3 years, for example. Thinking long term also means doing an analysis of the current market: knowing the needs, opportunities and important events. This way you can make the best decision.
How much money is needed to invest in the stock market?
When starting to invest and want to make money, it is advisable to use your savings and, of these, only invest a maximum of 30%.
For this reason, a good minimum amount to invest can be 1,000 euros. An expert could advise you to do it with 10,000 euros, but without experience (or without having this amount) we do not believe that it is the most
Do not invest money that you need in the short term
The good thing about the stock market is that you can quickly convert your investment into liquidity by selling your shares. The bad thing is that this can make you lose money if you do it at the least appropriate time, and it can also have associated costs if you operate through an intermediary.
In the case of Clement, one of the lessons that has helped him the most when investing in the stock market is not to use the money that he will need in the short term. The amounts that he invests in his stock portfolio are those that he is sure he will not need for a long time. Thus, if he needs liquidity he will not have to undersell quickly and, if the stock market falls and some of his investments lose performance, it will not be a big problem, since he has more funds.
Take into account investment costs
When you start a project it is important to consider all the costs, keeping in mind that you may have to cover a fee upfront.
How much money can you earn in the stock market?
It cannot be guaranteed with certainty how much money you can earn in the stock market because it will depend on: how much you invest, the risk you assume, the time in which you want a result… Furthermore, it must be said that investing in the stock market is not synonymous with guaranteed profits.
That said, by choosing an asset that has proven its profitability, we can achieve up to 6% in the long term, which would be more than correct.
Do you want to invest and make money in the stock market? Remember that if you are still a beginner and have little capital, you can start with small amounts, since today the markets have more options and do not require large expenses.
Do not forget that the process of how to make money in the stock market requires high expectations to generate income in the short, medium or long term. And don’t forget the risks, which are also part of the process.
If you still have doubts, it is best to consult with an investment consultancy and let yourself be advised by a financial educator, who will help you reduce some mistakes and play it safe. The important thing is your financial stability according to your decisions. And if what you need is to improve your savings capacity to obtain the money you are going to invest, put yourself in the hands of our experts to learn how to better manage your finances.
