Take the first steps in the stock market, instructions for use
At first glance, it is not easy to start working in the world of the stock market. The choice is huge, companies to invest in too. A brief overview to get you started.
For starters, it’s best to avoid investing in leverage or short positions. You risk losing more money than you originally invested.
DOCTOR
Stocks, bonds, ETFs, short positions, does that speak for you? For many, these concepts are abstract and reserved for insiders. According to Alain Greter, Yuh’s brand manager, the best way to become a good investor is to start, everyone should have their own experience. “It simply came to our notice then that we were learning despite this world, which may seem difficult at first. This barrier needs to be broken. Trade and investment are also psychology, ”he said. Far from promoting a unique course of action, he shares with us feedback on his own experiences and observations among Yuh’s clients. The company’s average age of investors is 31 for women and 32 for men.
These minimum commissions apply to each investment unit, ranging from a few francs to about 95 francs. Therefore, it is sometimes unprofitable to start with small amounts. “If I want to invest 50 francs. in stock, but what I already have for 20 francs. it’s worth it, it’s not worth it, “says Alain Greter. Therefore, it is important to find out from each bank about the fixed costs they impose per unit. Depending on the amount we are willing to invest, we will choose the bank that suits us best.
Sort among products
At the beginning of the work is not recommended to invest in products with leverage or in short positions. These are products where you risk losing more money than you originally invested.
-
products with credit credit. They have a multiplier effect. You go with an initial budget of 100 francs. that the bank complements 900 francs. Therefore, you have 1000 francs. speculate. This is the equivalent of a debt you enter into to allow you to process larger amounts. The profit margin will be multiplied according to your leverage. On the other hand, if your performance is negative. you still have to return 900 francs. not forgetting the extra costs caused by the transaction and your initial bid. Therefore, the potential losses are significant.
-
Short position. You are betting on Tesla shares because you are sure that it will lose value in the market tomorrow. The bank will act as an intermediary between those who want to lend and those who want to take action (and take costs along the way). You receive Tesla shares with a current value of $ 700, which you will have to return within a certain period of time. As you expect the stock to fall, hurry to sell the stock on the market for $ 700. If your predictions are correct, you will buy it cheaper, return it to anyone, and earn the difference. However, this is not always the case. If the stock rises sharply, you will still have to buy it back. And there the losses are endless.
“The higher the risk, the greater the potential for victory, but it also works the other way around. At Yuh, we do not offer leverage or short promotions, ”says Alain Greter. Therefore, these are products that you can turn to if you already have some experience. Cryptocurrencies are also risky, but you never lose more than the amount invested.
“The main thing is to start, but with small sums.”
On the other hand, regular investments are a smart way to get started in the stock market. according to Alain Greter. Like a standing order, you can, for example, decide to automatically invest a certain amount every first Monday of the month in a certain action. This product requires the ability to invest certain amounts, not shares, which is called “fractional trade”. As the stock price changes over time, this fixed monthly amount smoothes out the investment and allows you to be much less dependent on fluctuations. It does not allow you to invest in action, but to invest in the amount of action. “Imagine Lindt’s share worth 95,000 francs today, which is too expensive for many people. Thanks to the fractional trade, you can decide to invest 500 francs. unique. All this with very competitive fixed costs. We have 0.5%. This combination of regular investment, fractional trade and competitive fees is unique in Switzerland in Yuh, ”he concludes.
Classic mistakes
The main mistakes are often psychological, according to Alain Greter. “Even if the stock I invested in falls sharply the next day, you should keep a cool head and, above all, not sell everything on a whim. You need to have a plan, discipline, goals and stick to them. How long do I plan to allow the stock to develop? What profit do I want to get before withdrawal? Panic is never good in such moments. As well as constantly emphasizing stock market monitoring, “it’s useless, you have to take care of yourself mentally,” he added.
“It is important not to panic and act on a whim. You have to have a plan, discipline and stick to it. ”
Diversifying your investments is also a way to mitigate risks. “If we invest in both oil and electric cars, we have our backs. If one falls, the other increases at all, ”explains Alain Greter. It depends on the strategy of each person. In all cases, it is important to know at least the company and product in which you invest. It is useful to use exchange traded funds (ETFs) for easy diversification. ETFs allow you to invest in a basket of stocks by dividing the amount invested between different companies. This minimizes risks, but also reduces the chances of winning.
Two useful sites: moneyland and Investopedia
Content made in partnership with Well
Did you find an error?Let us know.