Editor’s note: This article was first published in September 2010, so its references to “ten years ago” point to around 2000.
Ten years ago I knew nothing about investing in the stock market, and I even got lost in financial jargon. I couldn’t tell the difference between an investment fund and a mutual fund, which I imagine is true of anyone who has never studied the subject. If it’s any consolation, it isn’t something they teach you at university.
That’s when you turn to paid courses to learn how to earn a return on your money by investing, whether in the stock market or in any other kind of financial vehicle. After a while, the result is that you could recite the definition of a given product word for word, but you still don’t understand when to invest, at what moment, or on what grounds.
At that point you realize that you won’t find the answers in the person teaching the course, because while they’re teaching it they are earning their main income from that teaching, and in most cases they have never invested their own money.
Since I had no friends who worked in investing, I had to go and find some. I sought out Robert Kiyosaki, Arthur Rock and Warren Buffett, and started reading what they say and the advice they give.
Over time you realize that buying shares in a company isn’t investing in a share. It’s investing directly in the company, so in the end the question you should ask yourself is: “Would I become a partner in this company? Do I trust that it will grow thanks to the way its chairman runs it?”
You stop giving so much weight to stock market charts, because that’s all they are: charts that brokers use to analyze the movements in a share’s price. And as we all know, most brokers either don’t bother to advise us properly, because we haven’t invested much money and we’re just one more client, or the chart turns out to be wrong, because, as we all know, brokers aren’t gurus; they’re people.
Then you go back to Robert Kiyosaki’s basic principle: don’t take advice from anyone who doesn’t invest their own money and charges you a commission for it. Robert may be wrong about that, but it is exactly the same advice Warren Buffett and Arthur Rock will give you.
I’ll get to the point, because if you’re here I imagine it’s because the title promised a free course on investing. Well, by writing one article after another, I put the course together without realizing it. Here I have written about practically everything that many investors have studied.
The first thing I learned about investing in the stock market was to be on the lookout for the mistakes I must never make. Once you know the mistakes, you can learn a great deal. The next step is to learn what the great investors have to say because, honestly, I trust what Arthur Rock or Warren Buffett might tell me more than a teacher who has never invested his own money.
That’s why I’ve put together a collection of articles that will serve as your introduction to investing in the stock market. Of course, you’ll have to keep studying and reading afterwards, but I think the first steps I recommend sum up the basics of getting started pretty well.
Some of the articles I’ll point you to may at some point seem to have nothing to do with investing. If that happens, read them again, because they are probably very direct messages for an investor. The first three articles were given to the magazine Emprende Jalisco for one of its issues.
- Step 1. First steps before you invest
- Step 2. Getting started in investing
- Common mistakes of beginner investors
- Serious mistakes you should never make when investing
- Step 3. Your first stock market investment
- 7 types of investors and types of investment
- Why the stock market is the most profitable investment
- What Arthur Rock looks at and analyzes before investing
- The best quotes from the best investor: Warren Buffett
I hope you find it useful.
Featured image: Unbekannte Autoren und Grafiker; Scan vom EDHAC e.V, Public domain, via Wikimedia Commons.
