START IN THE STOCK MARKET: Key strategies for beginner investors

Investing in the stock market can seem complex and intimidating to beginners, but with the right strategy and good preparation, it becomes a promising avenue to financial growth.

This step-by-step article is designed to introduce you to the basics of stock market investing, focusing on selecting stocks, mutual funds, and ETFs (Exchange-Traded Funds), while helping you avoid common mistakes.

Before diving into stock market investing, it's crucial to define your short-, medium- and long-term financial objectives. Are you looking for long-term growth, regular income through dividends, or a combination of the two?

Your risk tolerance, determined by your time horizon, your financial objectives and your comfort with market volatility, will greatly influence your investment approach.

Clarify your financial objectives before you start. Ask yourself why you are investing. Is it for retirement, buying a house, or your children's education? Your objectives will influence your investment strategy.

Investing without a basic understanding of the stock market and the different types of investment products is like navigating without a map. It is crucial to understand what the stock market is, how it works, and the different types of financial instruments available.

Take the time to educate yourself on the basics of investing, the different types of shares, mutual funds and ETFs, and how to read financial reports and market indicators.

The stock market is where shares in public companies are bought and sold. Investing in the stock market means buying a share of ownership in a company in the hope that its value will rise over time.

Selecting a brokerage platform that meets your needs is a fundamental step. Compare transaction fees, accessibility, analysis tools and educational resources. Many platforms offer demo accounts, allowing you to familiarise yourself with investing without risking real money.

For most investment strategies, we recommend you the serious broker with low fees: Interactive Brokers.

Investing directly in shares gives you specific exposure to a company's performance. For beginners, it is advisable to start with well-established, financially sound companies. Use financial ratios such as P/E (price/earnings) to assess whether a share is overvalued or undervalued.

Mutual funds offer instant diversification, managed by professionals who spread the investment over a portfolio of shares, bonds or other assets. They are ideal for those who prefer a more passive approach.

ETFs combine the diversification of mutual funds with the ease of buying and selling shares. They often track a specific index and generally have lower management fees. They are ideal for investors seeking exposure to entire sectors or indices.

Determine how much you can afford to invest without compromising your financial security. Never invest money you may need in the short term.

Don't put all your eggs in one basket. Spread your investments across different assets to minimize risk. Re-evaluate your portfolio regularly to ensure that it remains aligned with your financial objectives, and adjust it according to changes in the market or your personal goals.

Investing according to trends or unfounded advice can be risky. Remember, when the media or your best friend "hears that", it's already too late.

Patience is crucial. Markets may fluctuate, but they tend to rise over the long term. Don't panic, if you've selected good companies, there's no reason why the price won't go back up once the storm has passed. The market is a reflection of human emotions, so control your own.

Investing in the stock market is an excellent way of building your financial wealth, but it's important to proceed with caution and knowledge. By following the advice in this article, you'll be better equipped to make informed investment choices and avoid common mistakes.

Remember, investing is a marathon, not a sprint. With careful planning and a thoughtful strategy, you can achieve your financial goals.