[2021-01-31] How to get started Investing in the Stock Market [r1vKtb7DYaI]

Hello and welcome back to my new video

about how to get started in the stock

market and my beginner's guide to

investing. So I've been investing in the

stock market for about 5 months now,

and I think I've learnt the basics, and I

thought I'd pass my knowledge on in the

form of a video on YouTube. Okay, so the

most important thing you'll need first is

a trading app, a brokerage app. Without

this, you can't do any trading. So there's

lots and lots of different apps out there,

and depending on where you live, you'll

have access to different kinds of apps.

So if you're American, you probably want

to use Webull, M1 Finance, Fidelity,

or maybe Robinhood. Or maybe not Robinhood

after the whole— after the whole

WallStreetBets thing. I don't think you

would want to use Robinhood anymore. And

the app you use is very important because

there's all different kinds of apps. Some

trading apps are very complicated and look

very intimidating, and then other apps

look very simple and easy to understand.

And this is what really screwed me over

because I nearly got started investing all

the way back in March 2020, which would

have been the perfect time to start

investing. The you-know-what was spreading

around and economies were shutting down

and the entire stock market just crashed

to a really, really low point. And if you

started investing in March, you would have

made so much money because everything just

bounced straight back up. And the reason

why I gave up on the idea of investing at

that time was because the app I tried

using was called Degiro. And this app is

just a really ugly looking app. It's

really complicated, very difficult to use

if you're a beginner, and it just made it

seem very intimidating. And I just, I gave

up and I didn't bother to try and learn

how to use it. It wasn't until later in

the year, around October, that I got back

into the idea of investing and I tried out

this new app called Freetrade. And

Freetrade is a really good app. It's my

favorite app. It's my main app that I use

for all of my trading. And it's just so

much better than Degiro because it's a

very simple app, doesn't overwhelm

overwhelm you with loads of technical

information and loads of technical things.

It's very simple to look at and easy to

understand. And if I had used this app all

the way back in March, I think I would

have gotten into investing and I wouldn't

have given up straight away, and I'd be so

rich right now. The problem is you have to

be from the UK or you have to have a UK

bank to be able to make a Freetrade

account. So if you're not in the UK, then

you won't be able to use Freetrade. But if

you do live in the UK, I really recommend

Freetrade. You can use my referral link

and sign up and deposit money, we both get

a free share. Okay, so now that we have

our trading app downloaded, we're signed

up, we've deposited some money, we need to

know how to trade and how to make money

from stocks. So what you want to do is you

want to find some companies that you

really like and you think are going to do

really well in the future, and they've got

a good product. And basically you want to

buy low and then sell high. Always

remember, you buy when the stock is low

and then you don't sell until it goes

higher. And you could just never sell.

Some people like Warren Buffett, they just

buy and buy and buy and they never sell.

So Warren Buffett has like 100 million

shares of Coca-Cola and he never sells

them because he gets dividends. Now what

is a dividend? Basically A dividend is

what some companies pay you 4 times a year

for holding shares in their company.

Now that sounds great, but the problem

with dividends is you need to invest an

insane amount of money into the company to

get any meaningful amount of money in

dividends. But I'm going to assume that

you don't have hundreds and hundreds of

thousands of dollars that you can just

sink into stable dividend companies like

Coca-Cola or Microsoft or McDonald's. And

when it comes to investing, there's lots

of different ways of investing. That's the

great thing about the stock market.

There's so many different tactics you

could use. You could just invest in very

stable companies like Apple or Microsoft,

but it will take a very long time to make

any money. Or you could put all your money

into an ETF, which is just a bundle of

hundreds of different companies, and

that's another way of making very safe and

stable income, but it's, it's just really,

really slow. Or you could try and pick

individual stocks that you think are going

to grow and 2x or 5x or 10x in

a short period of time. That's a fun way,

but it's also more risky. You could learn

how to read balance sheets and learn how

to analyze a company's financials to

determine whether it's a good company to

invest in. Or you could just be lazy like

me and not bother with any of that and

just watch YouTubers who talk about stocks

who do know what they're talking about.

Or if you're feeling really crazy, you

could go onto the WallStreetBets subreddit

and then just get some meme stocks like

GameStop or AMC or Nokia and BlackBerry.

They're pretty fun as well. So investing

and the stock market is kind of like war.

It's pretty much a battlefield. And each

stock or each company is a different

battlefield, a different arena. And you

have your troops, you have your loyal,

faithful soldiers, and that's your money.

So if you've got $10,000 or £10,000, that

means you've got 10,000 troops ready to

deploy. And the goal of the game is to

deploy your troops into an arena or

battlefield or a stock and capture the

enemy troops to boost your troop number.

And as the leader of your troops, you have

to decide where you want to deploy them.

And you have to think very carefully

because if you place them in a bad

position, they're going to get wiped out

straight away. Now, the key to winning in

the stock market is you want your troops

or your money— you want your money

deployed in stocks at the right time.

So when a stock pops, which means it jumps

up suddenly by 10 or 15%, you've already

got your troops deployed there ready to

take advantage of that situation. You

can't wait for it to pop and then deploy

your troops afterwards because you've,

you've missed the pop. It's too late. Now

when it comes to building your portfolio,

diversification is important, but you

don't want to spread your troops out too

thin over too many stocks. If you've only

got £1,000 and you spread out that £1,000

over 20 different stocks, then you're

spread out too thin. And even if 1 or 2 of

them pops by 10%, you're not really going

to make much money. You're going to make

like £10 or £20. That's, that's nothing.

That's rubbish. So you want a bit of

diversification, but you don't want too

much. If you put more, a higher

concentration of men or money or troops

into one stock, when that pops, you're

going to get way more money. But if it

doesn't pop and it goes down, you're going

to lose money. But you never actually lose

money in the stock market unless you sell.

Even if it goes down, it will eventually

go back up. So as long as you don't panic

sell and sell at a loss, you can't really

ever lose money on the stock market unless

the stock or the company you invested in

goes bankrupt and then it goes to zero.

Then yeah, you'll lose everything, but

then it's kind of your fault for picking a

rubbish stock. The Roman Empire failed

because eventually they just spread

themselves out too far and they had too

much territory. They couldn't defend all

of it all at once. They became too big for

their own good. They were spread out way

too much, they were way too diversified,

and in the end they collapsed. And the

same thing can happen in the stock market.

You don't want to overextend yourself.

You want to choose good stocks and then

focus on a few of those, maybe 4 or 5

depending on how much money you're willing

to deploy, and then just make sure you've

got good picks and focus on those. The

most important thing about investing is

your portfolio. What is a portfolio?

Basically, it's the collection of stocks

you have on your trading app. They call it

a portfolio, and you want to build a

strong diversified portfolio. Don't know

if you've played a game called Clash of

Clans before. It is a mobile game that was

extremely popular, and you had to have

like a— you had to build an army and then

attack other people's bases, and you had

to build a good strong army with a good

mixture of different troops. So you'd have

the giants, they're slow, lumbering, but

they soak up damage and they're very

important so that your troops don't get

attacked too much. And then you have

barbarians, which are like your main foot

soldiers. Then you have your ranged

troops, archers, and you have magicians

that fire, shoot out fireballs. Basically

the stock market is the same. You need

some slow giants like Apple, Facebook,

Microsoft. They're good solid stable

companies, and if the market crashes or

there's a lot of volatility, your

portfolio won't take too much of a hit if

you've got some of these giants forming

your backbone. Now you can't just have

giants. If you had an entire army of

giants in Clash of Clans, you're not going

to win. It will take a very long time,

and then eventually the giants will get

worn down. They don't do enough damage,

and they'll get taken out one by one. You

need some foot soldiers and archers. Now

you can't just have only archers or only

barbarians because then all of the towers

are just going to take them out and

they're just going to get completely

destroyed, they're going to be like ducks

in open water. You don't want your

portfolio to be like a duck in open water.

Basically what I mean is you can't have

the majority or all of your portfolio in

quick-moving stocks that are just going to

pop up 10% or 15%. They can also pop down

10% or 15%. And if your entire portfolio

pops down by like 10% or 15%, you're going

to see a lot of red the next day and

you'll be sad and you'll cry. That's all I

have to say for beginners new to the stock

market and investing. Hope you found it

helpful. If you'd like to join Freetrade,

use my referral link and we'll both get a

free share, which is very nice.