1. What is investing? 2. What are assets and how to identify them? 3. Investment terms you should know 4. How to get started with investing in the stock market.
This thread is for absolute beginners who want to invest using the Jamaica Stock Exchange - @jastockex
It's an overview of the process, what is needed and where to look for information.
🧵
What is a Stock?
A stock represents fractional ownership of a publicly listed company. A company will issue a stock to raise Capital to fund its operations, purchase equipment or any other objective.
The first time a company lists is called an Initial Public Offering - IPO
1/
How do you make money from the Stock Market?
Two main ways:
1⃣ Capital Appreciation - you purchase stocks and resell at a profit.
2⃣ Dividends - some companies pay out dividends from their profits. This varies per company and isn't guaranteed.
2/
Margin is the money borrowed from a broker to purchase an investment. This is usually a $ of your overall portfolio and your existing securities are used as collateral for the loan/margin.
1/
The use of margin can amplify gains, however, it can also amplify losses.
@anandchokkavelu shares the perspective that many do not consider enough the disadvantages to margin in considering the risk of their portfolio going in the opposite direction when using margin.
2/
What is Common Sense Investing according to @NickGreenr?
Quite simply its doing the obvious, follow these simple steps below to get out of your own way as an Investor
🧵
Tip #1 - Follow Your Curiosity
Read the Annual Reports, News and any information about companies in the industries you're familiar with. It starts with being curious about the companies and NOT the stock prices. Ignore the NOISE...
1/
Tip #2 - Educate Yourself
Spend time to learn the language of Investing. Accounting terms, Financial Statements, Ratios, etc. are all worth getting to know so you can interpret what others say about the companies you're interested in. Being educated means better decisions
2/
Here are some tips to help you take control of your finances, increase savings and manage debt
These tips may not work for every situation, however, can be adapted to suit each persons needs
Thread
1/
Tip #1 - Start a Budget
You probably guessed this first one. It's obvious, it works but many are not sure how to start and how to remain consistent. A budget doesn't mean you are perfect with your spending...it means you consistent track and measure where your money goes
2/
cont'd...
If you spend more than budgeted, think about why it happened and try to put measures in place to stop the habit or mitigate against the decision for the next month.
Also, look for patterns of spending that represent opportunities for savings.
3/
🚨 Beginner Mistakes to Avoid In the Stock Market 🚨
Experience is no doubt the greatest teacher, however, there are some mistakes you want to be aware of as a new investor.
Watch out for the following mistakes and tell us if you have made any of them...
Thread
1/
Mistake #1 - Not Understanding What You're Buying
A #stock represents part ownership of a listed company. When you own it you should treat it as you would a business that you're now a shareholder. This means you should manage your portfolio as a list of companies you own
2/
Mistake #2 - Not Doing Any/Enough Research
Imagine being successful in the Stock Market and not knowing why. Sounds weird? This happens to a lot of new investors who BUY because someone else told them to BUY or they inferred from a post on social media
3/