GUIDING LANGUAGE
Beginners with zero fundamentals want to invest in stocks but don't know how to take the first step?
This introductory stock investing tutorial will take you step-by-step through basic investing knowledge about what stocks are, what are the types of stocks, and more, and strategies for starting stocks for beginners.
A must-learn investment knowledge for beginners in stocks. Start by investing in stocks and this article is done!
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Directory:
Step 1 to Getting Started with Stocks: What are Stocks?
Getting Started with Stocks Step 2: How to Make Money Investing in Stocks
Step 3 of Getting Started with Stocks: How to Buy Stocks?
Getting Started with Stocks Step 4: What do you think about stocks?
Getting Started with Stocks Step 5: What are the types of stocks?
Getting Started with Stocks Step 6: A Beginner Stock Investment Strategy for Beginners
Stock Nomenclature Lazy Pack
Step 1 to Getting Started with Stocks: What are Stocks?
Stock
Stocks are certificates issued by companies to investors when raising capital. When an investor buys a stock in a company, he or she owns part of the company and becomes a shareholder in that company. For example, when you invest (buy) a stock in an Apple company (stock code: AAPL*), you become one of the shareholders of the Apple company.
* Any securities displayed herein are for illustrative purposes only and do not constitute any investment advice or guarantee.
Share
Shares are units of ownership of the company. For example, if you own 150 shares of Apple stock, that means you own 150 units of Apple.
Equity
Equity is the size of the proportion of shares held by shareholders in a company. For example, Apple has about 150 billion circulating shares, and if you own 150 shares of Apple company stock, it is equivalent to owning 150 billion shares of Apple company = 1 billion shares.
Let's explain these three concepts with a practical example:
Suppose you want to invest in an Apple company and buy 150 shares of AAPL, then you become an Apple shareholder with a small share of Apple shares, and those 150 shares are shares in your hands.
Getting Started with Stocks Step 2: How to Make Money Investing in Stocks
After learning the most basic concepts of stock investing, let's talk about how to make money investing in stocks.
Let's illustrate again with a simple example:
Suppose you plan to plant an apple tree, but do not have enough money, and then someone is willing to give you an investment, so they become the shareholders of the tree.
In the future, the Apple harvest will be distributed to each shareholder as a return on investment.
For an apple tree, the return on investment comes mainly from two aspects: one is the growth of the fruit tree and the other is the fruit that is harvested.
In the same way, the benefits of investing in stocks come from two sides: one is the spread that the stock price increases, which is greater than that of the apple tree; and the second is the dividends received, just like the harvested apple fruit.
Stocks Earn Spreads
The main way to make money on investing stocks comes from rising stock prices, that is, buying when stock prices are low, selling when stock prices are high, earning stock spreads.
However, falling stocks can also be made money (short selling stocks) by borrowing and selling stocks, and then buying them back at a lower price after the stock price falls. This approach is more advanced, and the investment risk is higher, and it is not suitable for investors who are just starting out in stocks, and it is not described in detail here.
Dividends Received
The return on investing in stocks also comes from dividends distributed by the company to shareholders. Dividends are distributed in two main ways: cash dividends and stock dividends.
A cash dividend refers to the distribution of profits by a company in the form of dividends to shareholders. For example, if a company declares a dividend of $1 per share, and you invest 1000 shares of that company's stock, then you will receive $1,000 in investment income.
A stock dividend refers to a company's return to shareholders by allocating shares and allocating new shares to shareholders in accordance with the shareholding ratio. For example, if a company decides to issue a 1:10 dividend, and you invest 1000 shares of that company's stock, then after the distribution, your holding becomes 1100 shares.
Extended Reading:Lazy people must learn to invest! Dog Stock Earnings Guidance
Step 3 of Getting Started with Stocks: How to Buy Stocks?
Knowing the basics of getting started with stocks, you must be wondering how to invest (buy and sell) stocks?
Before investing (buying and selling) stocks, you first need to open a securities (stocks) account. Just like depositing money in a bank, you need to open a bank account first.
Securities (Stock) Account Opening Process
Step 1: Head over to the Futubull network and sign up for a new account.(Register now)
Step 2: Open a securities account on the basis of the Futu account.(Open account now)
Step 3: Fill in your personal and financial details (includingBank Code and Account Number), and then deposit funds via EdDA Quick Deposit, Fast Transfer (FPS), Bank Transfer.(Invest immediately)
Step 4: Download the Futubull Customer Portal and log in.(Download now)
Getting Started with Stocks Step 4: What do you think about stocks?
BEGINNERS WHO ARE JUST STARTING TO INVEST IN STOCKS OPEN THE TRADING APP, AND IT'S EASY TO GET CARRIED AWAY BY COMPLEX AND REAL-TIME CHANGING INFORMATION AND DON'T KNOW WHERE TO START?
Here's what investing stocks should look like now:
List of actions
When we open the stock action list, we can see information about the stock name, the stock code, the latest stock price, and the rise and fall.
For example, Indyda in the figure below, the stock code is NVDA, the latest price is 469.500 with a rise and fall of +0.81%.
Tencent's share code is 00700 with a recent price of 302.600, with a rise of -1.37%.
Tips: The stock code for Hong Kong stocks is a digit starting with 0, and the stock code for US stocks is the English abbreviation of the company.
>> The design images displayed on the screen are for illustrative purposes only and do not constitute any investment advice or guarantee.
Extended Reading:Getting Started with Investing in Stocks: An Illustration to Understand What Hong Kong Stocks Are Different From US Stocks
Detailed quotation
After clicking on the stock quote page of a stock, first of all, we can see the summary fields of the stock, such as the highest price, lowest price, today's opening price, and yesterday's closing price.
>> The design images displayed on the screen are for illustrative purposes only and do not constitute any investment advice or guarantee.
The design images displayed on the screen are for illustrative purposes only and do not constitute any investment advice or guarantee.
While it is too complicated to understand the changes in stock prices over a period of time, it is too complicated to record the highs, lows, today's opening and closing prices. However, this information can be systematically recorded in a visualized way with Yin Yang candles.
Therefore, to understand the movement of stock prices, we first need to understand what the Yin Yang candle is composed of:
Yinyang candles consist of three basic elements: solids (candlesticks), shadows, and colors.
For daily charts, physical markers indicate market prices and close prices, shadows indicate highs and lows, and colors reflect the direction of stock price movements.
IF CLOSING PRICE > OPENING PRICE, IT IS USUALLY MARKED IN GREEN, INDICATING THAT IT IS A SOLAR CANDLE.
Conversely, if the closing price < the opening price, it is usually marked in red, indicating that it is a candle.
Trading Hours
Before we start investing in stocks, we also need to understand the rules of trading stocks.
Hong Kong Stock Trading Hours
The trading hours of Hong Kong stocks are mainly divided into three phases (Hong Kong time):
Opening hours: 9:00am- 9:30am
Continuous Trading Hours: 9:30am- 12:00am, 1:00pm- 4:00pm
Closing time period: 4:00pm- 4:08pm to 4:10pm Random close
US Stock Trading Hours
Trading hours for US stocks and Hong Kong stocks differ and are mainly divided into three phases (US Eastern Time):
Pre-market trading hours: 4:00am- 9:30am
Continuous trading hours: 9:30am-4:00pm, closed at noon
Post-market trading hours: 4:00pm- 8:00pm
In addition, for some US stocks, Futu will support overnight spot trading from 8:00pm-4:00am in the US East.
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It should be noted that US equities use daylight saving time and winter time, and the corresponding Hong Kong time is explained here by the continuous trading period:
US Summer Time (March-Nov) corresponds to Hong Kong time 9:30pm- 4:00am
Mid-winter time (November - March of the following year) corresponds to Hong Kong time 10:30pm- 5:00am
Extended Reading:Is it easier to get started with Hong Kong stocks compared to US stocks and more opportunities to make money?
Getting Started with Stocks Step 5: What are the types of stocks?
The US and Hong Kong stock markets add up to the tens of thousands of stocks in size and size, and each company has its own characteristics and advantages. However, it is not possible for everyone to receive it all on their own. So, let's introduce you to two classifications of investing stocks to help beginners understand what types of stocks they want to invest in while getting to know the whole market overview.
Classified by stock market capitalization
Stocks can be divided into large stocks, medium stocks, and small stocks according to the company's market capitalization.
Where, the calculation of the company's stock market capitalization = share price x shares (i.e. the number of shares issued publicly by the company)
For example, Tesla TSLA* has a share price of 219.96, a share capital of 31.74 billion, and a calculated stock market value of 6982 billion.
* Any securities displayed herein are for illustrative purposes only and do not constitute any investment advice or guarantee.
Classified by stock characteristics
On the other hand, stocks can also be divided into growth stocks, value stocks and income stocks, depending on the characteristics of the company.
1. Growth Stock: Companies that are in a phase of rapid growth. The shares of such companies have greater growth potential, will spend the money earned on research and development, etc., and less dividends will be issued. Investors can benefit from strong growth in future company values.
2. Value stocks: Usually refers to companies whose value is undervalued by the market, such companies may not have significantly increased in earnings, but are in good operating conditions and the share price is now undervalued. Ideal for investors who want to buy stocks while the stock price is cheap.
3. INCOME-BASED STOCKS: COMPANIES WITH STABLE DIVIDENDS. Such companies are at a mature stage of development, and the share price may not fluctuate greatly, but they will issue dividends steadily. Suitable for investors with a low risk preference who want to invest a stable income through stocks.
Extended Reading:Explosive Potential Stocks Are Yields Steady Yields? I've got a haircut for you!
Getting Started with Stocks Step 6: A Beginner Stock Investment Strategy for Beginners
Before you start investing and buying and selling stocks, remember to do your homework to find a stock start-up investment strategy that works for them.
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First, we want to understand your stock investing style and investment preferences to determine what type of stock investor you are:
Active investors
Active stock investors are more risk-averse and pursue high risk, high returns, and want investment returns to outperform the market, and are suitable for active investment strategies.
Resilient investors
Robust stock investors who are both risk-averse and returnable can accept a certain level of investment risk and seek return rates that are similar to those of the market. Consider combining active investing and passive investing strategies.
CONSERVATIVE INVESTORS
Conservative equity investors tend to invest in low-risk investments and do not seek too much return and prioritize asset value appreciation. Comparisons are suitable for passive investing strategies.
Then we can find a stock start-up investment strategy that works for us.
We can use passive investing to bring us reasonable returns from the stock market, and we can use proactive investing to try to generate excess returns on our investments.
In fact, we can get answers from the investment philosophies of three stock investing masters—Warren Buffett, Willian Gann, and Jack Bogle.
Everyone is no stranger to their style of investing in stocks: they are the most typical representatives of value investing, technical analysis and passive investing, respectively.
Proactive Investing
Active investing is suitable for active stock investors. Simply put, this way of investing in stocks requires you to do your homework by “picking” and “when to pick” to decide what stocks to invest in, when to buy stocks and sell stocks. Hoping to win the big market and get a return on investment that beats the big market performance.
Value Investing
Buffett, the stock tycoon, is the most typical representative of value investing. Usually, we can analyze the value of a stock that is not worth investing in by value investing.
Value investing is “buying a good stock at a reasonable price”, first discovering a good company and then valuing that stock, investing when the value of the stock is undervalued.
So, how do you get to know a company so you can find the best stocks you want to invest in? And how to assess whether the value of this company's stock is now undervalued?
In general, we can use indicators such as NAV ROE, PE, and market net market PB to help us discover quality company stocks and determine whether the investment will be expensive now.
For more detailed and advanced stock investing tips, you can read:
Extended Reading:Stock Entry to Advanced: Building Your Winning Investment System (AUDITION PACK)
Technical analysis
Unlike value investing, technical analysis believes that any news in the stock market is reflected in the stock price, and history repeats itself with nothing new under the sun.
Therefore, it is possible to predict possible future directions by analyzing the past performance of stock prices.
Generally, we can determine through technical analysis that stocks are not suitable for investment right now.
Technical analysis is more focused on analyzing yin-yang candles, etc., for example, we may have heard that AAPL* stocks form a favorable yin-yang candlestick pattern, or TSLA* stocks form a favorable chart pattern on the bottom of the head.
* Any securities displayed herein are for illustrative purposes only and do not constitute any investment advice or guarantee.
At the same time, there are also technical indicators such as MA, MACD, etc. that we often see when we look at stock price movements.
Extended Reading:Getting Started with Investing in Stocks: Tech Indicators Are Lazy, and 90% of People Use Wrong?
Passive Investing
The “father of index funds” John Berg thinks that it is too difficult to beat the market and we can get average returns by investing in the entire market.
Simply put, passive investing is a very friendly way to invest for most stock investors, especially stable stock investors. We don't need to spend too much time researching company stocks, or analyzing complex stock price movements. Get almost a return on investment and the big market while not risking too high an investment.
The most common methods of passive investing are stock index funds and stock ETFs (exchange-traded funds).
For example, we must have heard of the Nasdaq index, the S&P 500, the Dow Jones index, etc., which are indices that track the movement of the entire US stock market. We can't invest directly in stock indices, however, we can invest in index ETFs and get pretty much a return on investment and the market as a whole.
Extended Reading:Getting Started with Investing in US Stocks: Reading the Four US Stock Indices
Investment Risk Management
However, we also need to note that no matter which investment strategy is adopted, you must learn to diversify investment risks.
Because a rise in the stock price is uncertain, even a good company will have its share price ups and downs.
Since investment risk cannot be completely avoided, is there any way that can help us diversify our investment risk, reduce investment risk, and thus improve our investment performance?
As the saying goes, don't put all your eggs in one basket, we can spread our funds across multiple stocks and across different asset classes, reducing uncertainty.
Extended Reading:How to reduce investment risk?
Take a look at the conclusion of the Stock Investment Gateway. If you want to learn more advanced stock investing knowledge, please come to Futubull and create your own long-term investment system!
>>Open now in Futu, send up to $1,400 in rewards, click here for offer details
Stock Nomenclature Lazy Pack
Bull market
The stock market is trending higher overall, and stock market sentiment is known as a bull market.
Bear City
Stock markets tend to be downbeat overall, and bearish stock market behavior is known as a bear market.
Yokura
Investors have a good view of the stock market and expect that the stock price will be favorable, so buy stocks when they are low and sell them when the stock rises to a certain price to get the spread.
Amakura
Investors are wary of the stock market, expecting that the stock price will fall, so sell stocks when they are high and buy them if the stock drops to a certain price to get the spread.
Advantage
Factors and messages that stimulate the rise in stock prices, favorable factors and messages for stocks to close.
Lai Tam
Factors and messages that cause stock prices to fall, favorable factors and messages for closing positions.
Opening of the store
Starting an investment can be buying or selling a certain number of stocks.
Empirical storage
Closing an investment can be buy after sell, or buy a certain number of stocks after selling.
Holding positions
Hold a certain number of shares.
Support Position
A support level refers to a stock price that may experience support when a stock price falls, thereby stopping a steady decline in a stock price.
Resistance level
A resistance level refers to a stock price that may be under pressure when a stock price rises, reversing a falling stock price.
Eagle Pies
Support tightening monetary policy to control inflation.
Pigeon Breed
Support a loose monetary policy to promote economic development.
chasm
Stock prices began to fluctuate significantly due to strong favorable or unfavorable news stimulus.
exceeded
REFERS TO A STOCK PRICE BREAKING THROUGH A KEY SUPPORT OR PRESSURE LEVEL AFTER A RESTRUCTURING.
trimmings
Indicates that after a period of rise or fall, the price of a stock enters a stable phase of movement and begins to fluctuate slightly.
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