Investing in the stock market cannot be improvised. That is why all securities account management interfaces offer the creation of virtual portfolios. This must be completed first before making real money. This will allow you to become familiar with the meanings and functioning of the markets.
Read and watch, these are the first two tips that can be given to any investor who wants to enter the stock market. Acting instinctively is the best way to lose money. To earn a lot, you do not have to do like everyone else, precisely because not everyone becomes rich. However, this implies, in turn, the acceptance of sometimes very significant risks. There is no big profit without big risks…
To understand how the different markets you can operate in, you first need to read a few books in order to become familiar with the vocabulary specific to equity portfolio management (you buy a portion of the capital of a company) or in relation to Forex, which corresponds to the foreign exchange market (euro, dollars, etc.). Each area has its own characteristics, risks and interests.
It should be noted that the French enthusiasm for financial markets was very strong after the health crisis. Thus, 2020 was the year of all records. According to the AMF (Financial Markets Authority), 400,000 new individual shareholders have joined the dance. In three years they even got a million. And the movement no longer seems to be reversed. However, compared to the general population, these numbers are still low, with less than 10% of the French directly owning shares. It’s a shame, because it is, nevertheless, in the long run the most profitable investment.
Start in the stock market (Fare, 90 pages, €9.55, 2019)
As the title suggests, Maxime Dubourg’s little book is specifically for those who want to learn the art of trading. This book does not claim to be a future millionaire’s guide. No, the principle is more modest, but also more realistic. You will learn the basics, including what are called the famous golden rules.
Financial strategist consultant, author intervenes in major schools. He is inspired by big names like Warren Buffett or even Peter Lynch. But the examples are given for simple and easy reproduction.
Psychology of great traders (318 pages, €35, 2011)
To go further, we can rely on the work of Tami Kabbaj, which has become indispensable. This time we put both feet on what is called behavioral finance. We are talking about studying the peculiarities of the psychology of investors in order to be able to profit from it and the better to predict the market reaction to the announcement of certain news.
The author bases his book on the analysis and synthesis of numerous publications on this issue. It is also a matter of understanding what allows a trader to perform much better than his peers. What characterizes those who do the best? The paths of the big names in finance are being scrutinized to try and follow in the footsteps of these giants. An enlightening book in many ways.
Warren Buffett: 24 lessons for winning the stock market (138 pages, €18.50, 2016)
We might as well rely directly on the word of the master, one who has ruled the world of the wildest financial dreams for nearly fifty years now. Namely, Warren Buffett. The man, often referred to as the Wise Man of Omaha after his hometown, amassed a considerable fortune by following very specific rules, to which he constantly returns during each of his public appearances.
James Pardo shares in this book the great lessons of the master on how to win in any situation in the stock market. Warren Buffett always has a habit of analyzing in detail the financial position of the companies in which he decides to invest. But he also carefully studies the state of the market in which the target company operates. And management teams are under scrutiny to see where they take the company. Strictness governs his investments, not chance.
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