5 Foolproof Ways on How to Learn Stocks
01 Dis 2021
How do you learn a skill, say playing a sport or telling the time? Think about it for a couple of minutes.
We’re pretty sure the same answer to the above question applies to how you can learn about stocks and the stock market.
We aren’t born knowing about everything. Yes, some of us have talents, but those talents need to be developed.
It’s the same with stocks. Even Warren Buffett didn’t talk about ‘stocks’ when he was born. He exposed himself to it and got better through time.
How then do you expose yourself to learn stocks?
1. Read books on investing
Ah, the first step to learning about almost anything – reading! Sure you can google methods on how stocks work, what are the steps to invest in stocks, and what stock market terms mean. We live in the information age anyway and all you want to know can be found online.
But we hope you’re critical enough to filter which resources are credible. For all you know, they’re just voicing out opinions rather than facts.
Or some of us like to seek other people’s opinions. Yes, they might be your family members, relatives, or friends, and you trust them. But the question you should be asking is this: Are they experts in stocks for you to follow their nuggets of advice?
If not, you’re better off consulting reliable sources – books. And no, don’t tell us bookstores are far from you. That’s just the lamest excuse you can give. Books are now sold online – and at a cheaper price usually. There are even audiobooks for you to read while walking your dog.
Then again, the same question persists: How do you know which books are good enough? Don’t worry, we have listed the top five investing books on Amazon in case you want to check them out.
If you’re committed to learning about stocks, make sure you have this first step covered. No excuses, please!
2. Enrol in investing courses
Now that you have brushed up the basics of stock investing from the books you’ve read, it’s time to explore courses that will delve deeper into the concepts.
Remember when you’re a child learning ballet or taekwondo? Your parents enrolled you in courses to make sure you get a stronger foundation on that same activity. Remember how we all went to school to further expand our knowledge?
With books, the author is talking to you, but you can’t ask him or her questions nor clarify your interpretations. This is where investment courses can help. You can interact with the trainer and be more enlightened.
Of course, there must be criteria in selecting which courses you should attend. As there are a lot of programmes promising to teach you about stocks, make sure to screen them according to the following criteria:
- Is the course relevant to what you want to know?
- Does the course have reasonable fees?
- Is the trainer an expert in the stock market?
- Does the trainer have first-hand experience in stock investing?
- Does the organisation/institution have the authority to teach about stocks?
- Do students of the programme get results after attending?
The list might seem long, but asking the above questions is necessary so you know you get your money and time’s worth.
See also: Are free investment courses worth your time?
3. Find a mentor or a coach
Some would say this step in knowing how to learn stocks is optional, but we say it isn’t. Having a mentor or a coach, not just in investing but in life, is crucial so you know whether or not you’re doing the right thing. More importantly, having a mentor or a coach is an assurance that you aren’t alone.
In investing, no one is an island. You would want to get important nuggets of wisdom from those who have experience doing it as the stock market is one tricky place. One mistake and you could be out of the game.
We’re not saying that having a coach equates to not making mistakes. It’s more of you having someone to learn from the mistake and not repeat it.
Still not convinced, are you?
Well, the world’s most influential people have their mentors: Warren Buffett is mentored by Benjamin Graham and he went on to mentor Bill Gates, Socrates mentored Plato and Plato then mentored Aristotle, and Mark Zuckerberg credits Steve Jobs for the latter’s mentorship.
Finding a mentor could take time, but you could slowly fulfil this step by joining a community of investors. As such, you’ll have someone to brainstorm ideas with. Likewise, being part of a community provides you with a good feeling of belongingness.
4. Do it yourself
Granted you have read books, watched video tutorials, and asked your friend to show you how to play the guitar, will you be able to play it on your own? Nope, we don’t think so.
Whatever we’re learning about, it’s not enough to just learn the concepts. It’s more important to test what we’ve learnt and really do it. It’s the same with learning about stocks. You won’t learn (and assess what you’ve learnt) without doing it yourself.
So go ahead, pick that guitar and strum away. While you’re at it, set up your investment plan and open your brokerage account to get started.
5. Don’t stop learning
So you’ve started investing in stocks... but you’re not done yet. Funding your account and letting your investment appreciate over time are not the final steps. You need to continue learning.
We’re pretty sure we’ve mentioned this somewhere: the stock market is a tricky place to be in. Hence, although you know the basics of stock investing (and can use that knowledge forever), it doesn’t hurt to sharpen your mind.
After all, some facts don’t remain facts forever (just think about what you know since decades ago about Pluto being a planet, only to be told it no longer holds today).
Learning is never a one-time session. It is a dynamic process. And those who know this are often the most successful ones.
Don’t believe us? Buffett, at 91 years old, still spends six hours each day reading books!
