How can I learn how to invest?

I want to invest in the stock market, I know nothing about it, where or how can I learn?

  • I have heard all sorts of things like semiconductors and forestry etc, and to invest in things that will always be needed, even in the toughest of times. How do I get started? How do I know what to invest in that will gain the highest returns? How do I learn about the terminology and structure of how it all works?

  • Answer:

    We can talk about several possible approaches to stock market investing. Most popular (of the easy approaches) are buy-and-hold and dollar-cost-averaging. Buy-and-hold is suited to long sustained bull markets, where the average returns will always take you higher over the long term. Arguably, we haven't seen a steady bull market for several years. However, it's always possible you might identify a winning stock, even in down markets. * Next, dollar cost averaging. To dollar-cost-average, you simply buy regular dollar amounts of stock at regular intervals. This causes you to buy more when prices are down, and less when prices are up. Dollar cost averaging is actually a very mild form of market timing. More elaborate forms of market timing, based on doing technical analysis of stocks, are generally risky and difficult to perform. * Sector investing is another relatively easy-to-learn approach. Here you trade funds between different sectors of the economy - i.e. defense, housing, banking, technology, gold etc. This strategy requires a good working knowledge of the economy. * Next are professional market timing systems. These are increasingly popular computerized services that provide buy and sell signals to investors, managed either though a broker, or with a direct subscription, and send you buy-sell signals via email. Some are risky and expensive (designed for day traders), while others are mild - providing only a trade or two per year for managing mutual funds or trading inside retirement accounts. * This just scratches the surface of this, there are many other types and methods of choosing investments. Links with examples of the strategies discussed are below.

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Stock market is a risky investment but without risk you never create wealth so your decision is right to invest in stock market. Before investment in stock market you decide your rules and strictly follow it otherwise you lost your money very fast.

JOANNE

What/how do your fellow NZ invest?? The problem is your options are likely limited in your country. How about the Aussie exchange, or British exchange, or the U.S. exchange. Don't know if you have access to these. You'll have to do some research here. Go to your library, or bookstore, to the business/money/investing section. See if they have Investing for Dummies by Eric Tyson. It will teach you some of the basics: stocks, bonds, mutual funds, asset allocation, diversification, etc. It's really geared to the U.S. market, but it will teach some universal principals. And no doubt there will be some books there geared to New Zealanders.

exactduke

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