To know how to invest in the stock market It is not just for millionaires. For example, in Mexico you can start with an investment of 1000 Mexican pesos.
Learn how to invest in the stock market
If you are in the habit of saving, you can start learning how to invest in the stock market And if you are not in the habit of saving, it is a good time to make your money grow.
1.First, put aside the fear of entering a market that seems complicated and perhaps you do not know.
- Then, without fear, advance saving by recording your income and monthly expenses and also include your debts.
- This calculation will give you as a result the amount of money you can save and you will even have a good overview of the expenses that are not necessary and therefore you can reduce them.
- You already know the amount of money you can invest, so try to invest it in financial instruments that are above the inflation index.
- If you invest in an instrument below inflation, in a short time your money will lose value because you will not be able to buy what you bought months ago.
Corporate debt
For example, if the yield on corporate debt is between 4 and 5%, but if you decide to invest in stocks, the yield may be higher if the yield amounts to 13.7% per year.
Investment fund
The brokerage house allows you to invest in mutual funds and you will create a portfolio with real estate, stocks, commodities and government debt.
The brokerage house
1.In Mexico it is called a brokerage house, but depending on each country it can be called differently as a stock exchange. If you want to sell shares or buy securities, go to a registered trading agent, as the agent works as an intermediary.
- A trading agent must be regulated, licensed and registered. The agent will give you the advice you need so that you can make a good decision when investing.
- When you want to invest or buy shares, as an investor, you should start by going to an agent and opening a client account and you will give a buy and sell order. The agent, as operator, will begin to execute your order in one of the systems that are enabled to negotiate.
- If you bought shares, they will be credited in the subaccount that will have been enabled in the securities box in your name and if you sold shares you can withdraw them from the subaccount and your funds will be credited according to the corresponding of that operation.
- Keep in mind that as an investor you will pay a commission and a market right, which the agent charges. The value of the commission is variable according to each agent.
Q is a broker
The broker is the agent that works as an intermediary between the seller and the buyer. Although there is a real estate and insurance broker, the financial broker is the agent that is responsible for carrying out the purchase or sale order of the financial instruments that the client ordered.
It fulfills its function by acting as an intermediary between the market and the client, looking for a seller at the moment that a purchase order is received from a client or looking for a buyer when the client orders it to sell.
The broker is the person who offers the client the financial instruments to operate, they can be energy, precious metals, raw materials, stock index, stocks or currencies.
The financial markets issue the regulations that brokers must comply with, they are also supervised and must have a license granted by the competing regulatory body.
Brokers Dealing Desk
Dealing desk brokers are those that have a money table, that is to say that as an investor, you can operate on the trading desk of that broker instead of operating in the stock market.
In this way, an internal market is created that works looking for buyers and sellers within its own clients and in the case of not finding them, it is they themselves who function as a counterpart so that they can ensure permanent liquidity.
Brokers non dealing desk
Non dealing desk brokers do not have a money desk, therefore they are only intermediaries in the stock market. They connect with providers such as banking institutions or large banks that act as counterparts for operations.
Brokers market maker
Market maker brokers allow you to execute operations quickly and without requoting prices. Bid and ask or buy and sell prices are not so volatile, because on the contrary they are considered stable and instead of working with variables, they work with fixed spreads.
In addition, it allows you a small minimum deposit, with a high level of leverage, operable microlots and since you can start with a minimum capital, they are the most recommended types of brokers for beginners or for those who start with a small account.
However, their disadvantage is the fact that you will not be able to use scaping as a strategy, and to say that you will not be able to close in the short term, because opening a buy or sell position and closing it in a few seconds or minutes is not allowed.
ECN brokers
ECN brokers make up a network of providers and clients with sufficient liquidity, after which a good spread is achieved. A conflict of interest is unlikely. The spread will be available at any time.
How to choose a broker
- Keep in mind that a broker is reliable.
- That it is a broker is regulated
- Choose a licensed broker.
- Then pay attention to the regulation that the broker is subject to.
- Check the regulation.
- Control the minimum deposit required to open an account.
- You should also pay attention to the leverage that it offers and has.
- What are the financial instruments it offers you and the commissions it will charge you.
Demo accounts
Before investing with real money, try a demo account. They are accounts very similar to the real ones but their balance is virtual.
According to the result you obtain in the operations, that virtual balance will increase or decrease. Of course you will not obtain monetary benefits, but it allows you to learn and test without having to deposit funds of your own money.