Warren Buffett famously has two rules for investing: Rule #1, Never Lose Money. Rule #2, Never Forget Rule #1. While this sounds discouraging at worst and unhelpful at best, there is a lot of truth behind the blunt words of the brilliant investor. Do your research. Don’t gamble. While even Warren Buffett himself has “lost” millions of dollars over his career, his point is that if you put in the time, energy, and research into truly learning about stocks, you can greatly minimize your losses.
General Tips For Learning About Stocks
There are a few different highly recommended resources you should look at in order to learn more about stocks and investing, but there are also some important general tips:
- Patience is key, investing takes time and practice
- You will always need to keep learning about stocks
- Educate yourself in relative, basic terms, jargon, and concepts
- Investing can be risky, only invest as much as you are willing to lose
- Study those who have been successful and why they have achieved success
- Practice trading through online simulators – these will allow you to trade using “virtual money” before trading with your own finances
- The market is volatile, we can always expect the unexpected to happen – expect it to happen.
- If you invest solely on speculation, you are almost gambling
- Do your research!
- Have a strong basis of knowledge in the stocks you are trading
- Through research find a great company with a competitive edge to buy stock in
- Owning stock essentially means you own part of the company; learn what makes a company good and what this company’s strengths/weaknesses are
- Treat stocks more as business ownership, and less as an abstract purchase
Resources
Books
A few books highly recommended books:
- “The Intelligent Investor” by Benjamin Graham and Jason Zweig
- “How to Make Money in Stocks” by William O’Neil
- “A Random Walk Down Wall Street: The Time-Test Strategy for Successful Investing” by Burton G. Malkiel
- “Stock Market Wizards: Interviews with America’s Top Stock Traders” by Jack D. Schwager
- “You Can Be a Stock Market Genius: Uncover the Secret Hiding Places of Stock Market Profits” by Joel Greenblatt
Blogs
Listed below are some great websites to refer back to and help you get your foot in the door, from defining important terminology to giving specific stock performance information:
YouTube Videos
Watching YouTube videos is a great way to learn from home as if you are in a classroom. Here are some good videos to get started with:
There is no way around it; educating yourself on different stocks, investing, and the context of the stock market is absolutely imperative to minimize future risk and maximize your chance of success, good luck!
