What does it take to start investing in stocks?

If you want to invest and see your money grow, you're in the right place! Check out everything you need to know to start investing in stocks.

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Starting to invest in shares is one of the main objectives of those who want to increase their financial wealth.

After all, by investing your money in good investment options, it becomes easier to make some dreams come true, such as buying your own home and having a more peaceful retirement.

To find out more, read on.

How does the stock exchange work?

Before you start investing in stocks, it is important to understand how the process works.

The stock exchange is an environment where shares and assets of various companies, fixed income securities, commodities, etc. are traded.

Negotiations take place daily through the auction floor – a time for offering bids and closing share purchase and sale transactions.

When you buy a share, you become a shareholder in a company, such as Magazine Luiza, Itaú and Petrobras.

As you can see, we are talking about a fully organized market. On one side, there are those who want to sell shares. On the other, there are those who want to buy.

Step by step guide to start investing in stocks

If you are reading this article, it is because you know the importance of investing to ensure a more peaceful future.

To help you enter this market, we will show you all the steps to get started. invest in stocks. Check it out:

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1. Organize your financial life

Organizing your financial life is essential for anyone who wants to start investing in stocks.

How will it be possible to have consistency in your contributions and your portfolio if you don't know exactly how much you earn, what your main costs and expenses are and whether you have outstanding debts?

If you have any outstanding financial obligations, it is best to pay them off first. This way, you will be able to invest in a much more relaxed and organized manner.

It is important to remember that the longer you leave a debt outstanding, the bigger the snowball will become. After all, the interest on outstanding debts is higher than the return you will get on your investments, especially if your focus is on the short term.

Therefore, it is very important to analyze your financial earnings, costs and expenses.

Therefore, we recommend that you do some financial planning before you start investing.

In this planning, it is important to include your salary, monthly expenses, outstanding debts and, of course, how much you intend to invest.

2. Start saving money to invest

Some experts say that the right thing to do is to set aside 20% of your salary for investments. Others say that the ideal amount should be 30%.

In fact, the more you can save to invest and have financial security in the future, the better.

However, what really matters is that you actually have enough motivation to save and invest your money.

If for now, you can only save 5% of your earnings to invest, great! As long as, of course, you commit to setting aside that amount every month.

Over time, you will be able to make more consistent contributions and diversify your portfolio. This way, your profit will be greater and you will be able to use your earnings to invest even more.

It is a mistake to wait until you have accumulated a significant amount of money before starting to invest in stocks.

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3. Create an emergency fund

An emergency fund is essential for anyone, whether they are an investor or not.

It is this reserve that will guarantee the necessary financial resources when an urgent situation occurs, such as job loss or unexpected expenses.

Ideally, the emergency fund you build should be enough to cover your expenses for at least six months.

4. Discover your investor profile

Are you conservative, moderate or bold? Or do you not know what these words mean?

We are talking about yours investor profile: the result of the analysis of your characteristics in relation to investments and tolerance to the risks involved.

There are three different profiles:

• Conservative: As the name suggests, these are investors who are more risk averse. They prefer safer investments, even if their returns are lower.

• Moderate: are people who accept a certain amount of volatility in exchange for good returns. However, they are not willing to take big risks.

• Bold: They are investors who are focused on investments that bring good returns in the long term, even if these are riskier.

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5. Study the stock market

Knowledge is essential for successful investors.

You can be sure that even the most experienced never stop studying the financial market.

Studying and monitoring market changes and trends prevents you from acting hastily and making wrong decisions that could lead to losses.

Anyone who wants to start investing in stocks should know that variable income is volatile. In other words, everything can change in a matter of days, hours or even minutes.

For this reason, look for reliable sources and always follow the main market news.

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6. Open an account with a brokerage firm

After creating a financial plan and studying the stock market, you will need to create an account with a stockbroker.

There is no way to invest in shares without opening an account with a brokerage firm, as these are the institutions that bridge the gap between investors and the stock market!

Buying and selling operations are carried out through the home broker, the platform made available by brokers to carry out negotiations.

Conclusion

Now that you know how to start investing in stocks, it will be much easier to invest your money and thus have more financial security in the present and in the future!

If you liked this article, also see “How to start investing in stocks: step by step”.

Click here.