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I have been investing in the stock market for a year now. And as expected, I get a lot of questions regarding this subject. Friends and workmates ask me how I started doing this, who my stockbroker is, how much amount is needed to start investing, if you could withdraw your funds anytime, or how much interest will it yield in a year. While most people are interested, there are also those who are fearful, thinking that investing in the stock market is risky. This blog aims to answer those questions.
People Fear What They Do Not Understand
This is mainly the reason why I encourage you to keep learning. It eliminates the fear.
I hear people say that investing in the stock market is risky. This is what I tell them. Everyday we are faced with different risks. Crossing the street is risky. For my fellow fieldmen, hours of driving is risky. (Note: Please get insurance.) Starting a business is risky. Even being employed in a huge company is risky when it decides to reduce costs in response to economic difficulty through letting go of its loyal employees.
More ofthen than not, we just have to weigh the risk versus the reward. If you learn the rules of investing, you will understand that the risk is nothing compared to the reward.
Two Ways of Investing in the Stock Market
Basically, there are two ways to invest in the stock market. Directly and indirectly.
You can invest indirectly through a Mutual Fund Company. There are a number of great ones around. You could earn around 12 percent per year. Through mutual funds, you have a fund manager who buys and sells stocks on your behalf. This is perfect for people who want to invest in the stock market, but do not have the time to learn how it works, and time to do it.
Last year, when the stock market was on sale, meaning you can buy great companies at lower prices, my cousin wanted to start investing. She wanted to do it directly, but unfortunately, she never had the time. Her money in the bank, which was supposed to be for her first investment, became liquid due to left and right mall sale. Now, she is starting to save again, and plans on investing indirectly instead.
Yes, you can invest in the stock market directly. This is how we invest at the Truly Rich Club. According to my mentor, there are only two acceptable ways of investing in the stock market: through Money Cost Averaging and Strategic Averaging Method (which we call SAM that was mainly developed for the Truly Rich Club). We faithfully follow our SAM because we grow our money in a quicker way.
When you invest directly, aside from the time to study how the market works, and time for buying and selling, you must also have the discipline to do it every month.
Choose which works for you. And when you have decided, make the commitment to do it TODAY. Make your first million through the stock market.
Happy investing!
