1. Fundamental analysis
In previous posts we have talked about the fundamental aspects of the market as a direct and precise indication about the future of the actions that interest you.
Fundamental analysis, as proven by great investors, is the most direct route to profit. The search for value, established by the solidity of the companies, by their decisions, by their way of responding to the needs of the market and by their history, is definitely the best way to invest.
When looking for a stock that interests you, you should consider the latest events that affect it. Thanks to the "News" section of our search engine you will be able to see those details, in which you should look for clues about its growth, its debt, its upcoming projects and its ability to respond to market needs.
2. Don't expect to make money quickly
As we said before, there are no short cuts to profit. Patience and strategy should be your main companions when you invest money in the stock market.
Many sell courses and quick recipes that try to convince you of a great trade that made them millionaires overnight, but behind these speeches there tends to be no proof.
Outperforming the investment algorithms of the big banks is virtually impossible and a strategy that focuses on fundamental analysis is more effective than searching for keys in daily movements.
3. Think long term
When you think about how to make money in the stock market you have to see time as your friend and not as someone you have to beat. In the long run, the market resists temporary variations and slowdowns in the economy.
This is something that has been well understood by investors who have been at the forefront of the world of finance for years. Warren Buffett, for example, took control of Berkshire Hathaway Inc. (BRK.A) in 1969, just a few months after Black Friday. However, patience and good investments have allowed Berkshire's portfolio to sustain and grow for more than 70 years.
4. Do not compete against traders
Investing in the stock market is about measuring the risks and opportunities of your actions. Following the recent trend of day trading and intraday technical analysis has led to huge losses for individual investors, many of whom sell their courses as recipes for success.
The reality behind these techniques is that an individual investor has everything to lose. Big banks and big Wall Street firms invest millions in digital infrastructure to outperform stock market algorithms, so they are able to get ahead of any prediction of stock movement.
At Folionet we advise against following this kind of pattern and we want our users to have tools that allow them to see the value of investing in companies with high added value in the long term.
5. Diversify
Diversification, it has been repeated thousands of times, is the only "free breakfast in the world of finance" and if you are looking to get the best return on your investments in the stock market, that should be your goal.
This is mainly due to the fact that diversification allows you to mitigate the risks and volatility of your portfolio by combining assets that react differently to changes in the market.
Suppose, for example, that you have identified an upward trend in the price of oil, so you decide to invest in an ETF of the world's major oil companies, but you understand that the commodity market is volatile and you decide, as a precaution, to buy a consumer staples ETF such as NEED.
An investment like this allows you, for example, to insure your money in solid consumer goods, which do not tend to fluctuate in price, while slightly increasing your risk in an oil ETF.
6. Consider the investment costs
When investing in the stock market to try to earn money, it is also important that you consider how much you should pay to start your path. You should analyze how much a traditional broker charges you to buy and sell a stock, as well as the minimum amount they require.
But when you use Folionet you don't have to worry about this. With Folionet you can open an account to invest in a short time, without depositing minimum funds or paying commissions for your trades . In case you don't feel ready to make your first deposit, you can start practicing with your paper trading account in a few minutes.
Furthermore, if you have enough experience in the stock market, you will be able to use the leverage that we offer so that you can invest with a higher volume.
7. Invest in ETFs
ETFs are the fastest growing product on stock markets around the world. They have grown to $4 trillion in listed assets and their growth is expected to pick up over the next decade.
These instruments allow investors of all kinds to put their money in a stock that replicates the behavior of an index or an entire industry sector.
By buying ETFs you will be able to have access to an instrument that is already diversified and compiles a group of actions, so you will not have to analyze in detail each one of the actions of a sector if you want to invest in it.
In our previous article ETFs – What are they and how to invest in one? We describe in detail the operation and objective of ETFs so that you can, in a simple way, learn about this ideal instrument for beginners.
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