Beginners Guide To The Stock Market | Daniel JC | Skillshare

Beginners Guide To The Stock Market

Daniel JC, Financial Teacher

Beginners Guide To The Stock Market

Daniel JC, Financial Teacher

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11 Lessons (36m)
    • 1. My Financial Journey and Goals For This Course

      1:54
    • 2. Basics of Investing - Who, Why, What, and When

      5:02
    • 3. What is the stock market?

      3:27
    • 4. Common Fears About The Stock Market

      5:52
    • 5. How To Buy Stocks [Live Example]

      2:57
    • 6. How Companies List On The Stock Market

      3:23
    • 7. 3 Questions To Consider Before Starting To Invest

      4:06
    • 8. ETFs vs Mutual Funds

      3:00
    • 9. How to pick stocks and basic research tips

      2:14
    • 10. Example $1000 Stock Market Portfolio

      3:18
    • 11. Closing Remarks

      0:45
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About This Class

I have been investing in the stock market every since I was in highschool and it is one of the greatest ways to build wealth. In this class, I want to explain the following

1. Basics of investing and why everyone should care

2. The basics of what the stock market is and what you are buying when you purchase a stock

3. Common fears that people have when considering investing in the stock market

4. How to buy stocks [live example]

5. How does a company go public (get listed on the stock market)

6. 3 basic questions to answer before jumping into the stock market

7. Investing in Funds: ETFs vs mutual funds

8. How to start finding companies to invest in

9. Example stock market portfolio for beginners

If you want to follow along my investing journey, come find me on Youtube: https://www.youtube.com/c/TheFireGrind

I also have a Patreon community where I give my current thoughts on the stock market and buy/sell alerts for stocks in my portfolio. You will get full transparency of my investing there! https://www.patreon.com/thefiregrind

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Daniel JC

Financial Teacher

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Transcripts

1. My Financial Journey and Goals For This Course: Hey there, welcome my stock market investing 100 course. My mission in life is to teach as many people how to invest for the future, instead of putting the money into a savings account in getting almost 0% interest. My story begins when I was a kid and I really enjoyed saving money. And I think it's more the fact of watching the account grow and the number gets bigger and bigger. It's kinda like one of those base race games like Clash of Clans. And I knew that if I save very well, this can have a material impact on my life later on down the road. However, as I grew up, I realized savings account weren't the best place to put my money. Instead, there's a place called the stock market. And at this point I got more fascinated with investing and open up a brokerage account under my parents. Initially, I only invested in mutual funds, however, realized there were a lot of fees with that and I ended up taking their money out of there in putting it directly into the stock market through various different companies. And ever since then, I've been investing in the stock market for four years. And over those four years, again, a lot of experience how to value companies, how to pick stocks, and just where to study research. And in the past year I've been doing a lot of content creation on YouTube, on my research in the stock market for Canadian stocks, the channel has grown from 0 subscribers all the way to 11,500 today in the channels called the fire ground, if you're interested in checking that out. So that's what I wanted to bring to you guys. Stay in this course. Just a quick overview of the stock market and a few things that show up for before you start investing. I will be coming out with more courses down the road, which have a deeper dive on my whole research process. So stay tuned for that. At the end of this course, I hope that you'll have a basic knowledge of the stock market and to be able to have the confidence to start paper trading or even investing yourself. I hope you guys learned a lot in, let's have some fun. 2. Basics of Investing - Who, Why, What, and When: Welcome to the first lesson. We'll be answering for different questions about just the broad general topic of investing. And the first question we have is, what does it mean to invest in a broad perspective? Typically, investing means to put your own resources into something and hoping that it will help grow that something into something bigger. This is a very broad definition of what investing is. And I think the reason why I kept abroad is because you can invest more things than just your money. You can invest your time as well as you can invest your resources. For example, you could use your social network as a resource to help a company, for example, to get connected to potential customers. So investing isn't just dealing with money all the time. The next question we should ask is why should we invest our money? So the reason why I think that most people will be wanting to investor money is so that they can use it towards retirement. Or other possible reasons could be using a towards a large purchase like a home or a car. But the main goal investing is really to grow the wealth that you have today and increase it in the long-term for people who don't actually invest their money and just let it sit in a savings account. They're actually losing money over time. And sure the dollar amount is not going down. However, let me explain a little bit further. If we look at house prices, for example, maybe in the 19 sixties, you could buy a house for $5 thousand, and that was considered a lot of money then. However, today if you buy something with $5 thousand, you could only get maybe an old beater car that's from 2012. So we can see from the small example that $5 thousand back in the 19 sixties was worth a lot more than $5 thousand is today. And that's because there's this thing called inflation. And what inflation means is over time your money loses its buying power because things or goods or services, and not getting more expensive over time. And this shifting value happens very slowly over time. However, if you're jumping from one period to another, you'll see the vast difference. This is the main reason why am advocate for people to invest their money and not just let us sit idle and a bank account or under the mattress. The third question that we should answer is when should we invest? And really the simple answer is to start today, because investing takes time to grow your money. The greatest industrial there, Warren Buffett says, timing the market is better than timing the market. Because no one knows what's going to happen tomorrow, a year later or five years down the road. In really when people ask this question, they're wondering ones index, stock market crash can happen slow, I can get into the stock market. But as I said before, no one really knows when the next stock market crashes. So we could be going five years from now without a stock market crash and the market goes up by 500%. And when the stock market crash happens, maybe it drops by 30%. You still would have been better off if you invested today, even though you think that the market is at all-time highs and things were a little expensive. And the practical reason of why you shouldn't wait till tomorrow to start investing is because businesses take time to develop. So practical example of this is, let's say you go there and you see this company that you really like and is trying to become the world's biggest lemonade stand company. Currently, they only have one lemonade stand. And their goal is to hit 500 lemonade stands all over the world. And right now, because they only have one lemonade stand there, not valued very high. However, it's going to take them a while to hit that 500 lemonade stand Mart. They're not gonna be able to do next week or even next month. They'll probably take two to three years to execute their plan. So by you investing early, you're gonna be getting it at a cheaper price. So by you getting an early right now, you're investing for the future when the company does become a company with 500 lemonade stands proportional accompany the shares that you own should become worth a lot more. The last question that we should answer is, who can invest their money? And really this answer is, anyone can investor money as long as they have so many, you actually don't need to be 18 years old or an adult investor. Money investing isn't just about buying into the stock market, which we'll be talking about today. However, there's many ways to actually invest your money. You can do things as simple as buying something in selling it for a higher price. So for example, if you're under 18, maybe you're an elementary school and you want to start investing your money. If you go out there by a bulk box of chocolate bars and each chocolate bar is going to cost you maybe $0.50. Then you can go to school the next day in Sally's chocolate bar for $2 to the kid who really doesn't care about money. So this is a way that you can grow your $0.50 into $2 within a matter of week. Basically, this is for accessing your money or a 300% gain, which is unheard of in the stock market for a single week. Even though you may be under 18 and can open up stock market account, you can do little things here and there to grow your money a lot quicker than people who are actually investing in the stock market. Use hotkeys your brain and think what people actually want and create some value for them. Hopefully you're able to take it a few key lessons as well as get a little bit more motivated into starting your investing journey. 3. What is the stock market?: The second lesson we have here is teaching us what the stock market is in its most basic form. People often see the stock market like you see, you know, you take your money, put it in a few bats, wait for a little while and hopefully a returns you 100%. But at the same time, you have the same chance of losing all your money as well. However, I think this is a very incorrect perception of what the stock market is because there's a huge difference between the stock market and what you can do at a slot machine at the casino. The slot machine is a pure gamble and you have no idea what the next outcome is unless you can hack into the code of it and figure out what it's going to give you on your next role. The stock market. However, there is a lot of logic into investing in certain companies in which companies you survive and which ones you should avoid. There is an actual underlying business behind it. And what you're placing your money on is in the actual asset that generates money in the future. Instead of like a slot machine, you have no idea if it's going to generate money for you in the future and not the first thing that you should know what the stock market is, that it's a place for individuals or institutions to buy and sell public companies. And these public companies are usually split into millions or even billions of small pieces. And each individual piece is called a share or a single stock. And when you as an investor or a single stock of a company, or multiple stocks of a company, you're essentially a part owner in that business. And you can think of all the stocks out there for the single company as a whole part. And you own a sliver of that pie based on the number of shares that you own. Let me give you a quick example of what this might mean. So let's say there's a company called Pink citrus and there are lemonade company. And this laminae company decides to go public in sellers shares on the stock market, and they only have each shares. So we're going to use HS for simplicity. And you as an individual investor, you go there, you see this company, pig Citrus. You do your research on i like i like this company. I want to invest in it. So you go there and purchase one share of pink citrus. And because there are only eight shares of this company, you own 1 eighth of the company, or 12.5%. And what does this 12.5% really mean for you as an investor? So the fact that you own 12.5% of the company means that you have the right to 12.5% of all their assets, as well as 12.5% of all their future earnings. So let's say pink citrus has eight lemonade stands. Effectively, you own one of them, assuming that all eight lemonade stands generate the same amount of income in our worth the same amount as well. You're going to be entitled to all the earnings from one single lamented sand, again with the assumption that all the lemonade stands are in the same amount of money. So from this, we can see that the stock market is not a gamble. Because if you're investing in this company called Pink citrus, and they have lemonade stands, which are generating revenue or generating money. Then you have the right to actually clean up money back as an owner and the company as your own revenue. The stock market isn't as simple as this, but this is a great example to give you an idea of what it means to own a stake in a company. So to conclude this lesson, hopefully you've learned what the stock market is and how it works in its basic form. In why the stock market is not just gambling like other casino. It's a great way to grow your wealth because when you invest in a company, you're investing in a company hoping that it's business as well over time, continues to generate more cash for you and eventually pays you back more than what you put in as an investment. 4. Common Fears About The Stock Market: In this third lesson, we'll be going over some of the common fears people have when they see the stock market and shy away from investing. The first few that people have is that they can lose money on the stock market. And this is a very real fear that people can have and it does happen. And in fact, it probably happens to a lot of people who invest without knowing the proper fundamentals. And the people who typically lose money in the stock market, and those people who buy high and sell low. And you might think to yourself, That's a really stupid strategy. Why would you buy high and sell low? And really the reason is you don't know when you're buying in if it's a high point or a low point. But at the end of the day, what I'm going to tell you here is that if you invest for long enough and keep your money in the market, eventually most things go up because the economy is a machine that continues to grow more efficient and generate more value over time. And those people who buy high might be buying it at a time. Where I've went is telling their friends at the water cooler, like all this, doctors jumped 20%. Well that's not jump 30%. You should get and now buy, buy, buy, buy, buy. And the reality is those people will go in and buy. And maybe a couple weeks later there's a market crash. And when the market crashes, they might lose like 50% of the money and see that paper loss and gets scared and celebrate their investment. However, in general, the stock market goes up, which means most companies also continue to grow in value over time. Some people buy because a friend at the water cooler tells him the bike is toxic going up. And they see the market crashed and it drops 50% and they sell out there. Those are the real losers of the market. But people who continue to hold through the low times, as well as buying those load times and socks are on sale, then those are the people who are the real winners. And that's what I want to inspire you guys to do through the stock market course is to stay invested for the long-term. The next common fear that people have is that if the stock market crashes after I started investing, and this is a very true fact that I could crash the next day. In fact, when I started investing in mutual funds, it was in 2008, right before the housing bubble. And I saw my count dropped by 20 to 30% as a like 14 or 15 year old knows like, oh wow, that was a lot of money that are lost here. And it took a number of years before that I can't actually recovered. However, the fact that it didn't sell means that I didn't realize any losses. And I kept on holding on. And if you're an events investor there, you might think this is not the best strategy, but for the general public out there. This is one of the most foolproof plans that you can have going into investing. The third common fear that people have is that the stock market is so complex that I don't even know where to start and I don't want even bother. Well, let me tell you this. The stock market is complex. However, there are some instruments out there that make it a lot more manageable. The things that they like ETFs are mutual funds, which are basically funds that hold a collection of stocks. And these are ways that you can invest your money, also reduce your risk and not have to worry too much about the whole complex system of a stock market. You don't need to go there and buy individual stocks. Instead, you can let someone else do the managing of your money for a very small fee. But in the long run with ETFs or mutual funds, even though you're paying a fee, you'll still do better than your bank interests, which is right now at around 0.25% in Canada. Last fear that we're going to address in this video is, what if I don't have enough money to invest in the stock market? I only have, let's say $1000. And here's my challenge to you. If you've got $1000, that's a great place to start with investing. There are many discount brokerage is out there or 0 phi brokerages like while simple trade in Canada as well as Robin Hood and one finance in Weibull and the states which charge you absolutely no fees for investing. So you can start with as little as even $10 on these platforms often times. And let me give you a quick example as to why believed that you should invest your money today and not shy away if you don't have that much money in the bank. Going with our example of $1000 that you have today, let's say you can commit to putting $100 a month into investments. So you're gonna do this for the next 30 years. So in total for 30 years, if you invest $100 a month and you have 1 $1000 in the account right now, you're putting in $37 thousand. And I think this is very manageable for most people out there. If not all people who are watching this video, see you invested $37 thousand. And we're gonna assume that you get average stock where he gains of 7% each year. And if we do the calculations on a compounding interest calculator, which is basically a way to see how your money grows over time based on this interest rate. The final value of your $37 thousand a year invested over the 30 years will be $128,900. If you were to wait to later, let's say, 15 years down the road and in deposit $1000 there. And instead double the amount that you mess every single month and get the average stock market returns of 7%, you're $37 thousand would only grow to $67,300. So basically the first $1000 and you put it into the market today, whatever energy is 7% interest each year for 30 years. So at first $1000 over 30 years at a 7% interest rate would equal to $7,612 down the road. In the case that you waited 15 years down the road and had 15 years to grow that first $1000, that 1 $1000 would've only turned into $2759. So $1000 invested for 30 years versus $1000 invested for 15 years. There's more than a two times difference between the final amount. So as I said in an earlier lesson, it's better to have timing the market and trying to time the market. I hope this final example in this lesson gave you a bit of fuel to continue forwards in this course, learn more about stock market investing and ultimately open your own brokerage and invest in the market as soon as possible. 5. How To Buy Stocks [Live Example]: So it might seem like a little bit of a mystery tear. And now how you actually buy pieces of a company in the form of stocks or shares. And it's fairly simple actually, you can go to your local bank or sign up for these discount brokerages online. A lot of this can actually be done online. Instead of having to see someone in person. For me, I've opened up a wall simple account, which I'll be showing you an example today. When you open up your account, you ought to fill out a few documents like your tax, your personal information on where you live, etc. Once you fill it all out, and you also have to be over the age of 18. You submit those documents, they get reviewed and typically it takes maybe a week for them to be reviewed before your account is approved. Once your account is approved, you can login through online brokerages and you can start looking around in there and searching for companies that you actually want to bar. So in this example I'll be showing you through, well simple trade, how I go about and by an actual stock. So let's say you go out there and do some research and you see this company called Real matters. And you're interested in buying this company after looking at the business. So you can go into your brokerage account and search for the symbol real matters. And I already opened up the page, so we're just going to show right here. So you can see real Matters has a ticker symbol, REL. You can see its performance is trading at $18.58 Canadian, and it's down to 0.16% in the past day. So on this brokerage ball's simple, you can actually see the performance over one week, one month, three months, one year, and five years. So you can see over three months, it's down about 26.68%. And I think there might be real value in the Stock, so I decided that I want to buy a share. So over here it shows you how you can place an order. Second place a buy order, or I can sell the stock. So actually do own some shares are real matter, but we're going to buy some shares today. You can see that I have $3,289 in my account and I will be making a by of the stock. So here we can cite how many shares we want to actually buy. So let's say I want to buy ten shares somewhere, it increases to ten. And you can see the total costs are estimated costs is $185.80. And then if you scroll down a little further, we can see this button called by real. And I'm going to click on this button to place the order. It's going to give me a conformation. And then I can place the order. And viola, that's how you buy a stock on a stock brokerage account. So it's very simple to do right now. There's no complex hoops, so you have to jump through to actually gone purchased share 20-30 years ago, you'd have to actually call into your brokerage and say, I want to buy this stock at this price. He put in the Order for me. But nowadays everything is online. It's very simple to do. And because it's online, it's, a lot of these platforms don't even charge a fee. So I hope this alleviated some fears or complexities that you might think that there is in stock market investing. It's not that hard to actually go there and buy shares. The research portion though is a little bit more complex, and I'll get into that later on in another course. 6. How Companies List On The Stock Market: In this lesson, I want to give you an understanding of why companies actually go public. So when a company starts is usually a group of people or an individual who has an idea that Watts and turn it into a business. And they may invest their own money initially to get the ball rolling. But then after a while, if they want to grow this business into a large company, they're gonna need to attract some investment. So typically they go to angel investors who were rich individuals or to some small funds who were willing to put in may be in the order of $1 million to $10 million. At that point when they raise on investment, they take that money and use it to put back into their business to buy things like equipment, hire more people, or just use it for general expenses. And when the company continues to grow bigger and bigger, the value of the company goes up and they can attract larger investment. And what these people along the way who invested into this company early on are hoping for is a return on their money. So the first guy who got in when it was very early stage, maybe as an angel investor, he gotten for very cheap price. And when the company grows larger, he's thought a portion of a pilot's a twenty-five percent, that portion of the pie has grown with a company value. Then the next guy that comes along might put in like a $100 million just to help the business grow even larger. So as the business continues to grow and grow, the value of the business grows, as well as the investment from those investors who invested, we'll continue to grow as well. But there comes a point in time in the company's life where the company needs to raise a large amount of money that these private firms or individuals can't supply. So if a company is wanting to raise, let's say $2 billion, this is when they might consider going public, where they actually go out there and sell a piece of the company until the public markets where investors like you and I can actually go there and buy these individual pieces of the company. So when a company goes public, there's kind of two main reasons why I see. The first reason is to raise more capital for the business. And the second reason is to allow their shareholders actually liquidate their positions after holding it for quite a while. And the shareholders are the earlier investors like the angel investor or funds, as well as the founding members in the employees of the company. When a company isn't public, the founders or early investors are employees, don't have an alert where they can actually sell their shares. So their capital where the assets are locked up in this company. The only way that they can hope to actually earn something back from their shareholders of a company is to the form of dividends. So when a company goes public, they're selling their shares in the market to people like you and I. And allowing the founders, early employees, as well as early investors, to sell off the portion of their investments and realize again on that. However, if the founders of the company, early employees of the company, as well as early investors sell off the shares. This doesn't mean that the company is going to crash and burn. In fact, these people probably have quite a bit of shares in the company and they're only liquidity, a portion of that, maybe a fun verification or their yacht or house or whatever they want to buy. Because you don't want to just keep all your wealth and the company that you felt. Eventually you want to take it out and use it for other things, maybe other investments, give it to your children or whatnot. So Lada, early shareholders and accompany, we'll solve a portion of the shares of the business once a company goes public. So I hope this gives you an idea of how companies actually end up on the public stock exchanges out there. 7. 3 Questions To Consider Before Starting To Invest: In this lesson, I'm going to give you three questions that you should answer before you start investing in the market. So the first question that you should ask yourself is, what is the goal of this investment? So the golf or your investment might be, I want to buy a house or I want to have enough money for retirement. Then the next question that stems from the skull is, how much money do you actually need and how long do you have to achieve this amount? So for a house, let's say you're looking for a down payment of $50 thousand and you want to buy this in the next five years, then you have a goal of $50 thousand and you have a timeline of five years. And for retirement, maybe you have a goal of $1 million for the next 35 years. So your timeline is 35 years and your goal amount is $1 million. For me personally, I'm investing for our chairman, R3 now, and my goal is 35 years to gather about $2 million. So the unloved day, I'm trying to hit $2 million in 35 years or less. The next thing that you should ask is, what risks are you willing to take in investing? There's different risk levels that you can take, which will mean that you can grow your money a lot of quick with certain investments. But their law, higher risk versus investments that grow a lot slower, but there's also less downside risks. For example, if you're a risk adverse person, maybe you want to put your money into things like ETFs or into banks or utility stocks, which are not going to go into business anytime soon. But if you're a riskier person like I am, maybe you invest into high-growth tech socks, which could be growing 20% year over year. But it's also been known to crash by 50% from time to time. And your risk levels are also determined based off your timeline. If you've only got one year in the market, then the likelihood that you wanna take high risk is low, in my opinion, in the market, one year is not a very long period. And if you look at some of the recessions that we've had in the past, these recessions can happen over a period of one or even three years. So if he only a one-year in the market and right now you don't know if we're gonna get into another recession or stock market crash, then I would say you want to be a little bit more risk adverse and buy into assets that are a lot safer. However, if you have 35 years like I do, then you can afford to take a lot more risks. Even if I invested at the peak of the.com bubble in year 2020, years down the road, my investment would have grown 161% if I stayed invested. If you only have one year to invest in, you invested at the peak of the.com bubble in year 2 thousand, you would have lost around 34%. So one year is not a very long time, so you should be a little bit more risk averse if your timeline and short. However, if your timeline as long you can let your money sit in the market, even though the stock market might crash. But eventually the stock market ends up going up in the long run. The last question that you should ask yourself is, how much time do you actually want to spend looking at your investments and this little term and what type of investments that you end up buying? Well, that's individual companies or funds for people who don't want to spend much time like near their investments, are doing research on stocks than the Rayleigh you should go is investing in ETS are mutual funds. And the reason for this is you have a lot less risk when you're investing in these funds because they hold a portfolio of companies. And their likelihood for all the companies in our portfolio to go down to 0 are virtually 0. So by investing in ETS are mutual fund in regularly depositing money into these investments. This is the most foolproof and easiest way to do investing. However, if you want to take the harder road and actually learn how to invest properly in pick individual companies, you can probably beat up the gains that you get from actually investing in funds, but it's gonna take a lot more of your time. So you have to really enjoy looking at companies, learning what businesses, and understanding the world as a whole in where it's going to be able to invest in the stock market and in individual stocks in dual. So third, this lesson, you should have been able to come up with a strategy for your investing, what your golfer investing this money actually is, and come up with a plan of what typical investments you wanna buy into, whether it's safer investments, riskier investment. Etfs are individual stocks or bonds. 8. ETFs vs Mutual Funds: In this lesson, we'll be going over ETFs versus mutual funds. So I personally start off with mutual funds and I think that was, you know, a great place to start, but it's not a place that I would recommend keeping your money in. In mutual funds, they have high management fees because there's people actively managing the portfolio of companies. You can think of them taking your money as well as other investors money and putting it into the stock market based on the goals of that mutual fund. And they take a cut because they have to be paid for their work. And these fund managers are actually going out there and actively buying and selling companies. But most oftentimes these fund managers don't actually do very well in the market because they are at a disadvantage in, can only invest in certain types of companies based on the portfolios objective. A better way to actually invest is through ETFs. Ets deploy similar shows you two mutual funds where they have a target for what they're investing in. However, the fees are a lot lower. Mutual funds, for example, might charge a 2% fee every single year versus an ETF might have a fee of only 0.5. percent. And effectively they do the exact same thing. The advantage that you get with mutual funds is that you actually get more service there. So you can actually go and talk to the institution who sells these mutual funds like banks and ask for some investment advice versus ETFs, you have to do your own research and know what sectors are industries that you want to invest in. However, it's not as difficult as it seems. Let's say you're very bullish on technology stocks. So you can just buy into a technology ETF. And for the most part, it should have a better return than it's mutual fund counterpart because they're less fees involved with an ETF. So as long as you have a general industry and mine than you want to invest into, then you can buy into an ETF and it'll return better than a mutual fund. One of the safest investments out there though, I think is one of the safest ETFs that people have been buying over time is actually the S and P 500. And this is an ETF which invest in the 500 largest companies on the stock market exchange. So these companies like Apple, Amazon, Google, Tesla, and all those other big-name companies out there that you can think of. And this is the safest investment in my opinion, because these companies, there's 501st of all and the likelihood of these companies failing is slim to none. Yes, there's gonna become piece here and there that don't do well over time. They only make up a very small percentage of the S and P 500 though. So although maybe one company fails a year, the rest of the companies as a collective and up going up because their businesses are booming. So in conclusion, my personal opinion is I, ETFs are always a lot better than mutual funds. Maybe where you could do is go to your bank, talked to them about mutual funds and ask them what sectors they think are great investment ideas right now. Then once you know that, you can go and find the equivalent ETF and bind to that. Instead of paying 2% of your money each year to that fund manager, you can just pay 0.5% in management feasibly ETF and be a lot better off in the long run. 9. How to pick stocks and basic research tips: In this lesson, I'm going to give you a quick overview as to how you can start picking companies. Are there? The first thing that I would suggest you to do is just say to yourself, what is your competency and what do you understand? Because when you're investing, you typically want to start out with investing in one. You know, if you're gonna go out there and investment biotech stock company, and maybe you're a janitor at a high school. This is probably not the best investment for you because likely you know nothing about biotechnology. Heck, maybe you do, and if that's you, then that's great for you and you should go invest in that sector. But I'm not trying to be little janitors here because generous also have their own advantage. And the janitor advantages, they know cleaning products quite well because they see the cleaning of products that are being used. And maybe the tested a bunch of them throughout the various roles. And they can see this company as a clear winner because they're cleaning product is superior to this other company. And they can take this knowledge going into the public market and start liking for companies which they use their cleaner products for everyday job. And this is a perfectly fine way to start your investing career. So take a look at the world around you, what products you actually use, what services do you use, and what companies you see as companies making a superior product in their industry. The next step in your research process is to look a bit deeper into the company and understand it as a whole. Company function well to the employees actually like working there to other people online who reveal that products, actually like the products. And it's not just to yourself. As well as how is their financial performance? Is this company growing over time or they actually losing money over time? These are some basic things that you can find out by going into sites like Yahoo Finance or even doing Google searches. The last thing that you might want to consider doing and before you invest in the company is looking at opinions of other people. So you can find a opinions on news articles on YouTube from analyst's reviews, or there's other various sources that you can go out there and look at. All you have to do is just Google this. So this is a very short research process I gave you here, but it gives you an idea of how you can go there, start looking for companies and how to do your research going forwards. Again, as I said before, I will be releasing another course in detail on how I do my own research on companies that I'm locking the volunteer. 10. Example $1000 Stock Market Portfolio: In this video, I'll be showing you how to construct a portfolio based off of only having about a $1000. The first thing we're going to go over is the reason for diversification. So the reason why you might want to diversify your investments. And so throwing all your money into a single investment is to reduce your risk. And how I would diversify a portfolio of $1000 is a split my money up evenly, $200 a piece between five companies in five different sectors. And the reason why I'm splitting up between five different sectors is because sometimes one sector does better than the other. And what a sector is, is basically a group of companies, the makeup, a certain type of industry. For example, we have the tech sector, which is made up of all technology companies are, there can be a health-care sector made up of all the companies that are focused on health care. Whether it could be a financial sector made up of companies that are all in the financial sector, like thanks for fintech companies. So the five companies that I've chosen here today, or Nike, which is part of the consumer discretionary sector. So this is basically items that you don't necessarily need, but they're nice to have. The second sector that I have is consumer staples. So these companies sell things up people need than the company that I chose here is love laws, their grocery chain here in Canada, and everyone needs to buy groceries because everyone needs to eat. The next company that I have is hydrogen-1. And this company plays in the utility sectors. So utilities are basically things like your hydro, gas or water. And the company that I chose in utilities is Hydro One. Hydro One provides electricity to people and the terminal area here in Canada. The fourth company, my portfolio here is Apple. And Apple plays in the technology sector. For most people there, you guys all know apple is, and they make the most iconic smartphone up there. And they have one of the best lines of laptops out there. The last company I have in this portfolio is TD Bank, and they play in the financial sector. So they offer banking services, mortgage loans, insurance, and products of the nature of financial services. So if you look at its portfolio, it's a fairly well-diversified portfolio across five different sectors. So I can have the technology sector, your head, and my Apple stock go down. However, the likelihood or the other four sectors getting hit is relatively low. And yes, all sectors will get hidden. A stock market crash that's regardless of what sector you're in. But for the most part, if one sector gets hit, it's only roughly 1 fifth my portfolio and the rest of our portfolio will stay relatively study or continue to go up. Now if we look on the screen here, you can see this portfolio and one share of Nike for shares, a lot of laws. Nine shares of Hydro, One, two shares of Apple, and four shares of td. And you can see their market values are roughly around $200 each, with the exception of Nike. And all these companies that I chose here are companies that I know of personally and a lot of them I've used their products. So I hope this goes to show you guys that it's fairly easy to come up with a portfolio of stocks and how you should look at the portfolio and maybe divvy up the money amongst them. I'll use a very simple method of just divvying up $200 for each individual company. But maybe you want to favorite technology more than financial companies because you're more bullish and technology. So you can adjust the strategy based on what you're comfortable with. But as a basic rule of thumb, the best place to start is evenly spread your money and then adjusted from there. 11. Closing Remarks: So wrapping up this course, I hope he has enjoyed and learned a lot from this course on how to start investing in the stock market. If you guys want to follow along my journey of investing, I'm over on YouTube and I do reveal my well simple tree profile y and buying certain stocks, Y and selling certain stocks. Since the law, more practical information on the day-to-day on YouTube there, this course was to give you a basic fundamental understanding of the stock market. And I hope you got that from listening to this. If there are any things that you want me to go more in detail or make new videos on to add to this course. Let me know in the reviews, but you can email me at this email on the screen right here. With that said, now you're ready to go into the real world and start investing in companies and making money and growing your wealth. Good luck investing in May time beyond your side. T-shirt.