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Starting In Stocks- Your Zero Experience Guide To Investing

teacher avatar Finance Fundamentals

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Taught by industry leaders & working professionals
Topics include illustration, design, photography, and more

Watch this class and thousands more

Get unlimited access to every class
Taught by industry leaders & working professionals
Topics include illustration, design, photography, and more

Lessons in This Class

16 Lessons (36m)
    • 1. Starting in Stocks

    • 2. What's A Stock?

    • 3. How To Buy Stocks

    • 4. Apps To Use

    • 5. Types of Orders

    • 6. Stop Loss/Limit

    • 7. Asset Allocation

    • 8. ETFs

    • 9. Bonds

    • 10. Compound Interest

    • 11. Dollar Cost Averaging

    • 12. Trading System

    • 13. Trading Mentality

    • 14. Dealing With Recessions

    • 15. Putting It all Together

    • 16. Sample Portfolio

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About This Class

Starting in Stocks is a video series of short 2-4 minute videos designed to take you from 0 stock market knowledge to being able to confidently and effectively invest in the markets! If you want a comprehensive guide to start investing for retirement, saving for vacation, or just being ready for an emergency, look no further. A word of warning, this is not one of those "get rich quick" classes! Those don't work! This class is about understanding the fundamentals of the stock market and investing, and learning to make smart and educated long term buys. 

I am not a financial adviser. This video is for educational and entertainment purposes only. You are responsible for your own money.

Meet Your Teacher

Brief and effective videos to get you confident about investing!

Want to get into the stock market but it seems too intimidating? You're in the right spot! Check out my "Starting In Stocks" class to get a step by step guide to entering the stock market. 

This 35 minute class will save you years of worry, so what are you waiting for?

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1. Starting in Stocks: Hello, everyone, and welcome to starting in stocks. Thank you so much for coming on this video. If you're looking for a simple and easy to understand guide to the stock market and you're in the right spot, this Siri's zero experience needed comprehensive walk through of getting into the stock market. Whether you just want to start out investing for retirement, saving for an emergency or even putting money away for vacation, this guide will give you a step by step instructions to do so. In just 35 minutes, you're going from having absolutely zero knowledge of the market to being confident and effective investor. Together, we're gonna go through 15 unique in crucial classes. First, we'll start off with what's a stock, then how to buy stocks that stops to use the types of orders. What a stop loss and stop limit order are. What asset allocation is what et efs are. What bonds are, what compound interest is, what dollar cost averaging is the trading system. You need to be successful, the trading mentality that you need to be successful, how to deal with the recession. Finally, we'll end with putting it all together, class and I'm going to give you a sample portfolio, go out there and start investing right away. If this sounds like something you're looking for and great stick around, let's jump right into it. 2. What's A Stock?: and today you are going to take that first step in the series. You will go from having absolutely no knowledge, being confident, investing your money to prepare for the future. Just a disclaimer. It's not another one of those get rich quick videos. Why? Because this does just don't work. Here's will see review. Anybody can get rich. It just takes time, and I will tell you exactly what to dio and show you how to do it. And easy to digest three deformity videos. I don't care if you're 12 years old or 62 years old. The stock market is for you, and I will show you just how easy it can be to understand. And at the end of this video, I'll tell you what 90% of people dio that lose money in the stock market and how to avoid it. So let's begin. What is a stock? Well, simply put, a stock. His ownership in a company. Think of the company as a big pie. The stock is a small slice in that pie, usually a very small slice. Companies very greatly, but usually public companies have millions of stocks outstanding or stocks available to trade, For example, you see this small sliver of the pie that might be what you own now, most likely or not commuting 2% of company. That's a very big portion. Anyways, when you own a part of this company there certain privileges that are associated with that some of the privileges that you get for being a partial owner of a company, our diffidence. Voting rights. If you own common stock, which is what we're trading and access to annual reports, don't worry. If you don't know what some of these terms mean, it will all be explained in future episodes. But honestly, you don't even need know any of this right now. You're here for this. Why do we buy stocks? How do we use them? Well, to keep it stupid, Simple. We buy companies because we expect them become more valuable. We expect that entire pie to get bigger. This is value investing. You'll see right here repurchased 2% of a company today in this medium size pie. Five years from now, with the entire pie, it's bigger and we still own the same 2%. But because the whole pies bigger are slices bigger. That's it. The entire value of the company went up, the value of our slice went up and we made tons of money in the process. What do the 90% of people that lose money dio they aren't value investing. They find overpriced stocks, which is essentially an inflated pie. The pie is inflated for many reasons, but often because speculation of that company and then the inflated pie gets popped and it shrinks and people get caught up in this and they lose tons of money. So that's what we're not going to dio. But don't worry. If you don't understand that that last part got a little complicated with talk of speculation, you're going have to worry about that now. All we need to know a stock is a portion of a company that you can buy. You bite today, let the company grow in value, sell it at some future point and make a profit. So I got for you guys have any questions even below catching the next one 3. How To Buy Stocks: Now you know what a stock is and how we make money with them. Let's learn how to buy them. To do this, you have to learn about brokerage firms. Now this is to meet some good general in photo have but also your ignorance of things that a lot of people that are heavily involved in the finance industry they don't even know this . So stay tuned, you learn a lot. So going. So in order buy stock, you had to go through a brokerage firm. Now what is broken for you? Well, in order to understand what brokered firm is yet to understand what we're buying stocks from brokers, firms essentially a middleman. So when you buy a stock, you're buying it on the secondary market. That means the buyer goes through a broker who links him to the seller. You're not buying it from the company itself. For example, if I'm buying a Microsoft stock, I don't buy it from Microsoft. I'm buying it from someone else who's selling that same Microsoft stock in a broker. It just links these two parties together, the buyer to the seller, That's it. That's all they do. But they get paid a lot of money to do this. Now, In the old days, brokers used to offer commissions for their services. That is, you pay them 3 to $20 really depends the broker per trade. Just make that trade. Now. In the era where the law more people trading, you see a lot of commission free brokers. This isn't people like Robin Hood. They don't charge these single payment commissions per trade. However, this is where a lot people mess up. They're not actually completely free. You see, there's something Hold a spread. The buyer makes a bid on a stock price. That's the price they're willing to pay. The seller has an ask price. That's the lowest price they're willing to sell it for. So the spread is the bit of minus the ask price. Now that the broker does is they split the difference. They cut it right down the middle, and they keep money on either side. So no matter if you're buying a stock, you're selling stock. That broker is making money, and a lot people don't realize this. Even with commission free trading, your brokers getting rich, this is financed. They did make their money. They're gonna do it. So why does this matter to you? Well, it's very simple. We're trying to make as much money as we can, and we don't want to give it away to these Wall Street brokers. So what, You have to do it. We have to minimize the number of trades it would go into. That way we minimize the brokerage firms. So now you understand how a brokerage firm works. And what in buying and selling a stock, it looks like and you understand spread, which is something I'm not. A lot of people understand your way ahead of the game already on this next video, I'm gonna tell you what some of moves popular brokers is our today and my personal favorite . So stay tuned to the extent 4. Apps To Use: okay. And today I'm gonna be showing you guys and brokerage firms so you can start putting your money into the market within the next 30 minutes. Sat easy. I mean, we're doing it down and dirty on some of the most popular brokers that air for beginners. And I'll give you the number one brokerage firm that I recommend every beginner. And even if you're advanced, you can use this. It's easy to use your love it. I'll show you that video. Let's get going. Number one. I'm sure you guys all heard about this one. Robin Hood. It's become super popular recently, and for good reason. Some of the pros or it's super easy. Used as great customer service. Very clean interface has very quick trading and low spreads. And because it's so popular, you can find tons of tutorials on YouTube it online how to use it now because it's so simple and streamline. There are some cons, has very limited stock data, and you must buy full shares. As of now. That might change in the future personally, Robin Hood's great start for beginners, but I think there are some better options. Next. Weeble, this one's a little bit newer than Robin Hood, but it's kind of a similar design. Has commission free trades again? Like we said last year doesn't necessarily mean free trades, but just commission free trading. Think about we will sell a lot more stock data. It was designed for mobile use. However, as you can see in this little sample portfolio down here, they can get pretty complicated. There's a lot of different indicators and Stockton functions you can use, and honestly, we don't need to worry about any of this. So it's not worth having a go over this higher learning curve to figure out. If you're gonna want some of this. I'd rather just go with Robin Hood Acorns. This one's a very interesting idea. How a corns worked is you link it to your paint counted every time you make a purchase, it rounds up and invest that money that I rounds up to. For example, if you buy a sandwich for $5.50 well rounded up to $6 invest that 50 cents, some pros are This is definitely the most passive way. You really don't have to do anything, and you're going to put putting money into the market. You're gonna invest while you shop some cons. This isn't really a con, but for me, a corns is more of his preference. If you want to be rounding all your money up and investing without actually putting any money into the market on your own, it's a good option. Personally, I don't really use it that often. And now my number one broken term that beginners to intermediate to advanced should use and that I use most often and one finance. This platform is great Super Street mind super simple use and has all the features you need . And one finding says pre made portfolios that are very high quality. You can start investing with the next 10 minutes with them one finance, and you'll be set for the next 10 years. You also get partial shares. So if you want to buy a share of, let's say Berkshire Hathaway, which is over $300,000 a share, you can only buy $100 with that share, and you would still get in on the action there. Some of the cons is not as streamlined as Robin Hood, but that being said, you could still figure it out within 5 10 minutes playing around with it. It's really not that bad. I highly recommend taking the time to learn it. Bill, pay off the end. You can see kind of what stable portfolio will look like. Everything and everyone finances broken into pies. Just a pie chart that showed you what you have. Very simple, very visual. It's a great set up now. If you guys want to sign up for these platforms, Hitler description, you could be the market with 30 minutes. It's like catching the next one. 5. Types of Orders: Now that you know what stocks are and understand how brokerage firms get their cut and how to make it count, you're ready to start buying. However, you may be surprised to learn there are multiple ways to buy stock in today. I'm into you through the two most common ways and what you can do. So So let's who started the two types of ways you can buy a stock are gonna be a market order or a limit order. Now, what are these? A market order, quite simply, is that you purchase a stock at the shown price on the stock page. That is the ask price of the stock. A limit order is when you purchase the price at a set point that you make. This doesn't mean you get to choose the price of the stock. It means you're making a bid at whatever price you choose. And if a seller selling on that price, the order will get fulfilled. So here I am on Robin Hood, I'm gonna show you what I'm talking about. The orders. This stock is video. Oh, it's actually an E T F. That tracks the entire S and P 500 but you don't have to worry about that. Just focus right here on how to buy you. Click three dots. It'll give you the two options we just talked about. There is a market order where you buy at the market price that is the ask price of the cellar. There is a limit order where you can set your limit price. That is, you're saying the bid price for the stock, and if another seller has the same, ask that's border. It will get fulfilled. So what should you do then? You should always place a limit order when placing a market order to buy it. Fulfilled at the shown price, with no chance going below that. However, if you place a limit order, there's a chance that earlier filled at that lower price. Essentially, it's placing an order in the hopes of someone is selling cheaper and show so to wrap up, always place a limit order to maximize the chance of undercutting the stock. The next video continues discussion going over some of the other options you see on the start page. Next time, don't forget to strive for daily videos 6. Stop Loss/Limit: way of remaining functions. You see, when you purchase a stock we're offering a C is D three terms right here. A stop loss stop limit trailing. Stop loss. What do these mean? And do we need to use them? Spoiler. We don't need to use any of them, but we're gonna go with them quickly. Just so you understand them a stop bosses simply setting a price to initiate an automatic market sell. That is, if the stock drops to a certain price, our broker will automatically sell it a stop limit. It's the same thing except with limit cell. That means we set the stop limit price. So that's gonna initiate a limit sell when it hits center in price at the set limit price that we put. And finally, a trailing stop loss is half the price to sell to go up with stock. That means when the stock price goes up, that bottom down that's going to initiate the autumn Accel that goes up to and you could choose to make up in a percentage base with stock price or a fixed amount. Now, like I said, the beginning of video Do we use them? No, We don't even need to worry about it. These are good tools to use, but for the type of investing we're gonna be doing value long term investing. They're not necessary. Remember, we are value investors. Me. We are buying companies, and we expect the value of that company to go up in the long term. So a stock price goes down. We don't worry. We know it's this a temporary dip. And because we know the value will go up eventually, Which is why we purchase company. We're gonna hold steady. We don't sell because price goes down. This is how people lose in the market. If you start selling as soon as the price starts dropping following the trend, it's gonna continue. Go down and you're gonna lose money. Don't let your emotions take over. That's all I got for you today. So you guys next time, but no free. Describe daily videos 7. Asset Allocation: asset allocation. This is probably the most important video I'm gonna make. If you understand this concept, not only are you ahead 90% of people in the stock market, but this is what people pay thousands of dollars to certified financial planners for. So what is asset allocation? An asset is something of value that you own in the case investing. It could be a stock, a bond, real estate or commodities such as gold or silver. Allocation is simply the percentage of that asset your portfolio is holding. This chart here is the key. Almost all professional financial planners. He's a very similar chart to set their client's portfolios, and they charged him thousands of dollars to do so. So how do we use this chart? If you look here at the top, it has a judge percentage. You wanna stocks in the percentage you wanted bonds to take an example. It's what, age 35 you would want 65% or portfolio in stocks in the remaining 35% in bonds. You see as you get older, percentage in stocks goes down and the percentage of bond go up. That's because as you get older you want, Take less risk in stocks are generally thought to be. Risk your asset in bonds. It's really that simple. Now I understand this is simply one option for asset allocation. There are many different ways to use this concept. This chart here has only stocks and bonds. You cannot other options, such as cash or other commodities like gold. I recommend just looking up an asset allocation chart by age on Google and find something you like to wrap up. You need to find an asset allocation plan that works for you, and you need to stick to it. Now. You understand that you need to have a certain amount of money in the stock market and certain amount of money in bonds or other types of markets to diversify your portfolio over the next few videos. I'll show you how do that in the proper fashion. So you guys next time, don't forget to describe for daily videos 8. ETFs: E. T s after asset allocation. This is the second most important concept to understand in order to be successful in the market. What is it? Exchange traded fund. Next fund, which is a collection of stocks. There's traded on the stock exchange. This means you combined Sell it exactly like any other stock. However, E T s have a much lower fee. The mutual funds which were the old way to buy indexes for the last video. You know how much of your portfolio to commit to stocks? That is asset allocation. However, what you need to do is not by individual stocks why individual stocks hold a greater risk in buying a collection of stocks. This is called diversification. By diversifying your stock section of your portfolio with large indexes of stocks, you're eliminating the idiosyncratic risk or single stock risk of that section of your portfolio. And that's exactly what E. T s will do for you. But there are thousands of E. T s on the market with nearly every single combination of stocks possible. So which one do you get? Volo S P Y an I V V. These three followed the S and P 500 was a collection of 500 large companies. I highly recommend putting the majority of your money into these. He would be an example portfolio building on what we learned in the last class with 65% in stocks and 35% in bonds. Within the 65% you can have any one of these ETFs or a combination of the three within the 35% you have bonds. This is what we're gonna go over in the next class throughout the series. I don't recommend Maury tax for you to consider, but for now and you, one of these or any combination is a good start. The stock section of your portfolio. That's all for today. Next class. We'll talk about bond stature before Leo. See this. 9. Bonds: bonds as previously mentioned. Bonds will fill your portfolio based on the asset allocation that you decide. But what are bonds? To buy a bond, you give money to a corporation or government with the expectation that they pay you back plus interest. Now, bonds have a lower average return on stocks as well as lower expected risk. On average, over a very long term, stocks tend to return 6 to 8%. Assuming your property ugly, Diversified has mentioned the last video. Bonds, however, are closer to the 2 to 4% range. So why do we want to buy bonds and simply to help lower something called market risk? As mentioned in the previous videos, stocks have specific risk called idiosyncratic risk. However, all stocks tend to correlate to each other at some level. This means it's possible for the entire market to go up there to go down. So even if we have a properly diversified stock portfolio, there still a chance the entire market will go down. For this reason, we put some more money into bonds, help lower this overall market risk, and as mentioned in the asset allocation video, the older we are generally want more money in bonds and less money in stock. So how do we buy bonds? My preferred method is to buy Bondi CS because they're really easy and convenient. Dio you're for that. I recommend the end the X B and D B L V v g i t. That's all for today. 10. Compound Interest: a common question. I hear his win. Should I start Investing is your question, but has even better answer right now. The sooner, the better. And this is because of a concept called compound interest. What is compound interest? It is simply interest on interest to give you an example, how compound interest works and how powerful it really is. Let's look at this example. This is called a future value chart. As you see here, you put in a present value, your starting amount and the number of periods. This is me 45 years, and you're expected return. We're using 6% which is a fairly conservative historical average of the stock market. So let's say a 20 year old invests $1000 at a 6% expected return for 45 years. So by the time they're 65 years old, that $1000 would have become over 13.5 $1000. That's the power of compound interest. Now let's say that that same 20 year old, instead of putting away $1000 at the beginning of the 45 years they put it $180 a year that $15 a month away for the same 45 years on expected 6% interest. So $15 a month, 45 years, 6% interest. That becomes over $38,000. I'm sure that we all have $15 a month to put away for a better future that leads directly into our next causes topic. Dollar cost averaging. That's all I got for you today. See you next time. 11. Dollar Cost Averaging: dollar cost averaging. This is a strategy. We put the same amount of money into your account every month or week or even every day. Put the same amount no matter how the market is doing. Why? Because by consistently putting money into the market, you get in on the highs and the lows. This means your average will be steady, and over the long term you will see returns no matter how the markets doing. For example, if you have $1200 to invest over the next year, you will evenly split that up into 12 $100 increments to invest every month. How many times have you heard this Buy the dip or buy low sell high? This sounds like a good idea, but it leads to the question. How do you know when the market is gonna be at the bottom of the dip or when the market is as lowest and tons of gurus out there will tell you that they have the answer to these questions and they can tell you for a price. That is not true. No one knows what the market is going to do. For this reason, it's your best bet to just consistently put money in at the highs and the lows. Also, it's just easiest way to invest. Many brokers offer recurring payments where you can just choose the amount and choose a frequency, and then you never have to think about it again. This is a screenshot from M one finance that shows you just how easy it is to set up a recurring payment. That's all for today. See Isaacson. 12. Trading System: creating a system. Now that you have all the tools to go out there and start investing, however, to say successful in the market for years and years, you need to create a system that you completely stick to. This is not need to be a complicated system. It just seems to be something that you were able to maintain. Compliance is the key. You have all the knowledge you need. You just need to put it together and find something that works for you. Find an asset allocation plant that you like. Do some research to see if there's any other assets that you would like to hold other than stocks and bonds, gold in real estate or something, I suggest. But also, if you want to hold stocks and bonds, that's fine. You already leaves ahead of anyone that isn't doing investing. By doing so. Find some E. T s to fit your needs. Go for market E. T s, such as the ones that we discussed earlier, or find something grown. There are thousands of options for you to look through and finally create a funding plan. Know how much money you want to put in the market every year. Divide that by $12 cost average by the bunk, or even my 52 to put money in weekly. But most importantly, just do something. Just get in the market and start playing around. You may be overwhelmed that first prime confident. Without the knowledge you have from these videos, you're ready to succeed. That's all for today. See next time. 13. Trading Mentality: trading mentality. A good system doesn't mean anything if you can't follow it. That's where a strong, disciplined mentality comes in. There will be days when you check your portfolio and you see something that you don't like . You have to trust the system that you created remain steadfast. Remember that you created your system off the principles that we learned in this course, and you need to learn to trust that system. Remember why people lose in the market? They lose because they let their emotions take over when they see a holding go top down 10% they get scared and they sell and they take a loss. Then what? Thousands of people do this, causing the stock to drop even more. People get caught in this downward snowball, and they take massive losses. But not us. We keep holding because we know it's temporary way even by another cell. If arses, some tells us, too, because we know that stock will go back up back to its properly valued price. Use what you have learned to create a system that you can trust. Then don't question it. Be confident that you create something that will work and then let it work. Take the time on the front end to make a system that you're confident it will take care of you on the back end. That's all for today. Next time we're gonna talk about the true test of will recessions. See that? 14. Dealing With Recessions: dealing with recessions. The first step to deal with the recession is to accept that it's gonna happen. The economy is cyclical. It has periods of major growth, followed by periods of recession. There is nothing that can prevent that. Our goal is just to realize it and take the steps to minimize the damage. Is that happened? A great resource? To understand this better is a video called How the Economic Machine Works by Ray Dalio, the founder of one of the largest hedge funds in the country. I'll leave the link below The good thing. It's a system we built was made to protect us from recessions through asset allocation. We have a hedge in the case of the stock market, dropping without being bonds, cash, gold, real estate or any other assets. Indexing traces from any single stock White began our account by dollar. Cost averaging continue to put money into the market during the recessions. Leading to very cheap by In price is the key thing for recessions is just to accept that they will happen. Do not act irrationally. When they do, you may see your portfolio trump up to 20%. He may lose all the gains that you got in the last five years. But don't worry. Never in the history of our stock market have you never been able to make out of a recession. It may take time. Just follow your system. That's all. Three day. See you next time. 15. Putting It all Together: putting it all together. We've gone over a lot in these past videos will see a little bit of time to recap. A stock is a portion of a company that weaken by. We buy stocks of companies that we expect to increase in value over the long term. We buy stocks through middle men called brokerage firms. We don't put all of our money into the stock market. We use proper asset allocation based on age. When we do buy socks, we buy index ones. You make sure have a portion of our portfolio in bonds. We start investing as early as possible to utilize compound interest. We put money into our portfolio on a consistent schedule. There we go. Not too bad. In the next and final episode, I will be showing you what a sample portfolio looks like when I put it together. Combining all of these principles 16. Sample Portfolio: I'm gonna show you a basic sample portfolio that I built using what we learned. I used someone finance to construct this. It contains 40% Volo. That's an E T F. The full is the S and P 500. It contains another 40% S p y. That is another ET that follows the S and P 500. This means that contains 80% stocks. This is a pretty high percentage in stocks. However, I am young and I have a high risk tolerance. So I'm so I am okay using this sort of asset allocation. Finally, I have 20% in BND, which is an index fund. Sorry, that is an E T. F. That follows a total bond market. I will be putting $100 a month into this portfolio if I expect a 6% return which is fairly conservative over the next 45 years or so, and I expect this portfolio to be over $250,000 by the time I'm in my sixties. Congratulations for making it through the starting in socks. Siri's. I applaud you for taking the time to learn something new, especially something is beneficial. That's how to invest. Well, it may seem like a daunting subject, I hope that you learn to see as anything but with their newfound knowledge. All that I ask is, you go start saving for your future. It's never too late nor too early. Also share your knowledge or the Siri's with anyone you think it would benefit, that's all like