Interested in which common investing questions are asked in 2020, be sure to check out this video to find out which ones you should know of.
2020, this is going to be my year! I can FEEL it!
Have you heard people say something like this before?
Well, I know I have.. students, new students and potential students… they come to me ask me about if 2020 is going to be my year… well, with the current situation we’re all in… I don’t know.
BUT, what I do know.. is that for investing, 2020 has been a great year.
And at the beginning of this year, I’ve had a huge increase in beginner investing students.
Questions I get from my Investing students
In the current state of the world, I get many new investing students, which is great. But they keep asking similar questions, and in order to just support them, and you. I’ll just go through them here.
Question #1 Is there a difference between a stock and a share
In the end, it’s the same. Stocks are the ownership of all shares together that you have in all the companies that you have invested your money in. share is , mainly talking about 1 piece of paper in one particular company.
Question #2 Why should I invest in Stocks?
It’s easy to get started.
Low budget, as many broker accounts offer the service of starting with $1 dollar.
The money is liquid, meaning. You can buy today, and sell right away, if you want to.
Possibility of high returns , when we take a look at SP500, on average on time span of 90 years, 9%
But we tend to use 7% corrected for inflation.
When you have No strategy
the S&P500 is a very simple and easy way to set your money aside, it generates an average return of about 9% annually, when you leave your money in for at least 10 years.
Question #3 Can you invest in S&P500
You can’t invest in Standard & Poor’s 500
But you can invest your money through the SP500 index
Question #4 Why are stocks risky?
To be honest, stocks aren’t risky.
The value given to the piece of paper by investors and brokers give people the feeling it is risky.
The moment your emotions take over, giving you the feeling that you don’t want to lose the money you invested, will make people sell at unnecessary moments.
Question #5 What’s a mutual fund?
To limit the risk of investing in one company, you can invest in multiple through a mutual fund.
This is a company that actively manages money from investors in a certain group of companies FOR YOU.
Now this can be very expensive as these managers need to be paid as well. This could be up to 2%
Therefore there is something called index funds. These are more passively managed, and therefore a lot cheaper to invest in.
Bonus Tip how to get started
Check any broker account that can buy/sell stocks for you.
Like robinhood, m1 finance, eToro, or any other one.
Find a certain strategy that you can follow, so you won’t have to depend on your emotions.
Why Investing always needs a strategy
if you don’t want to be losing money unnecessarily, be sure to find someone to learn a certain strategy from.