Getting started in stocks and shares can be confusing for the beginner. Stock market investing can be very profitable though so it pays to learn some of the basics. Once you master those basics however it can also be great fun – even for a beginner.
Stock market investing can seem daunting at first because it is plagued by jargon and that’s often the hardest part to get to grips with. To overcome the mystique of stock market terms and jargon you can buy specialized dictionaries which will explain them in simple terms. This as much as anything will help any new investor gain confidence by letting them in on the “secret code”.
So what are the basic principles of investing in shares as a beginner? Stock market investing really comes down to finding hidden value in a company or companies that other people haven’t spotted yet. That will enable the new investor to buy those shares at a cheaper price and then resell them for a higher price at a later date.
To help you spot those golden nuggets of hidden value you can either get the help of full service stock broking companies or alternatively you can begin to learn how to read stock market indicators for yourself. It is beyond the scope of this article to go into depth about these indicators but in simple terms they are methods of seeing if a stock is following a particular trend either up or down.
There are many different ways of measuring these trends with some becoming very convoluted but almost all of them are designed to find patterns that show that a stock is worth investigating further.
If you are new to investing you might want to consider employing the services of a full service broker and asking them to explain to you how they have come to the conclusions they have. You could then try to discover for yourself what made them recommend either buying or selling that individual set of shares by “reverse engineering” using some of the technical indicators. It’s always useful with any investment to try to discover the “why” of the investment as this will help you to repeat your successes and avoid your failures again in the future.
Just a word of warning – be careful though because even for the beginner stock market investing can become addictive!