greenieS
Verified member
Buying and selling stocks looks exciting in movies, and the earnings of articles published by the offline and online business press look good. Maybe you thought of such an activity at some point (or if you didn't, then maybe you're thinking now!).
In recent years, the number of companies and platforms that offer you access to shares listed on the stock exchange has increased. A capable broker or a well-made online platform will help you open an investment account quickly and without too much hassle.
Stock exchanges offer many stocks in many fields of activity (not to mention many other types of traded instruments - bonds, government securities, derivatives, investment funds and more). Sounds good so far, but where do you start?
How do you know which are the best stocks to buy, especially if you are just starting out? You can find many opinions and opinions in the press, on specialized sites, on forums frequented by investors, at brokers or analysts and from many other sources.
If you are willing to invest time and effort (in addition to money), then you can start studying all these opinions, read about stocks, their performance, the results of the companies that issued them, etc. Over time, these investments will be able to pay off.
But we are not all the same. Maybe you can't or don't want to invest time and effort to understand these things. You just want to invest in the stock market without too much hassle.
Finance experts have "invented" a solution suitable for such situations. If you don't know what stocks to buy, then it's best to buy a bundled stock selection (a "stock basket" - as it's called).
What are we talking about, exactly? There is a special class of investment funds called Exchange-Traded Funds (ETFs). As you may know, an investment fund attracts money from individuals and legal entities (investors in the fund) and invests them in order to make a profit for its investors.
Basically, a fund simplifies the life of those who want to buy shares, bonds, government securities or other financial investments but do not know where to start, offering them "on the tray" a basket of such investments.
ETFs, mentioned above, are a special class of funds that are, in turn, traded on the stock exchange. Therefore, if you do not know what stocks to invest in, then you are looking for a suitable ETF to buy on the stock exchange and thus you will indirectly invest in a basket of stocks chosen according to a certain strategy.
The problem is simplified a little but not at all: you no longer have to choose stocks, but you have to choose a suitable ETF. How do you make that choice? You will find a wide range of ETFs with different investment strategies on major international stock exchanges.
Well, we can simplify the problem even further. Stock exchanges or some major financial companies select certain lists of representative stocks on the basis of which they calculate a stock index. It represents an average of the stocks so selected and shows the overall evolution of a stock market (you may have heard, for example, of the famous Dow Jones index showing the evolution of US stock markets).
To understand a stock market index, think about the inflation rate: this shows you the average increase in consumer prices for the most important products, if you do not want to analyze separately how much the price has increased for each product; Similarly, a stock index shows you the average change in the stock market, based on the most representative stocks, if you do not want to analyze separately the evolution of each stock.
There are ETFs with a simple but valuable strategy - simply to copy a stock index. In fact, there are studies that show that investing in an index brings, in the long run, higher returns than the individual choice of shares according to various opinions, strategies or recommendations.
Thus, at least at the beginning of your investor career, you can benefit from the performance of the most important shares listed on the stock exchange without worrying about their choice: you can buy an ETF and you will indirectly own the most representative shares on a certain stock exchange. . And for advanced investors, an index ETF offers a quick and easy way to diversify a portfolio of stocks.
In recent years, the number of companies and platforms that offer you access to shares listed on the stock exchange has increased. A capable broker or a well-made online platform will help you open an investment account quickly and without too much hassle.
Stock exchanges offer many stocks in many fields of activity (not to mention many other types of traded instruments - bonds, government securities, derivatives, investment funds and more). Sounds good so far, but where do you start?
How do you know which are the best stocks to buy, especially if you are just starting out? You can find many opinions and opinions in the press, on specialized sites, on forums frequented by investors, at brokers or analysts and from many other sources.
If you are willing to invest time and effort (in addition to money), then you can start studying all these opinions, read about stocks, their performance, the results of the companies that issued them, etc. Over time, these investments will be able to pay off.
But we are not all the same. Maybe you can't or don't want to invest time and effort to understand these things. You just want to invest in the stock market without too much hassle.
Finance experts have "invented" a solution suitable for such situations. If you don't know what stocks to buy, then it's best to buy a bundled stock selection (a "stock basket" - as it's called).
What are we talking about, exactly? There is a special class of investment funds called Exchange-Traded Funds (ETFs). As you may know, an investment fund attracts money from individuals and legal entities (investors in the fund) and invests them in order to make a profit for its investors.
Basically, a fund simplifies the life of those who want to buy shares, bonds, government securities or other financial investments but do not know where to start, offering them "on the tray" a basket of such investments.
ETFs, mentioned above, are a special class of funds that are, in turn, traded on the stock exchange. Therefore, if you do not know what stocks to invest in, then you are looking for a suitable ETF to buy on the stock exchange and thus you will indirectly invest in a basket of stocks chosen according to a certain strategy.
The problem is simplified a little but not at all: you no longer have to choose stocks, but you have to choose a suitable ETF. How do you make that choice? You will find a wide range of ETFs with different investment strategies on major international stock exchanges.
Well, we can simplify the problem even further. Stock exchanges or some major financial companies select certain lists of representative stocks on the basis of which they calculate a stock index. It represents an average of the stocks so selected and shows the overall evolution of a stock market (you may have heard, for example, of the famous Dow Jones index showing the evolution of US stock markets).
To understand a stock market index, think about the inflation rate: this shows you the average increase in consumer prices for the most important products, if you do not want to analyze separately how much the price has increased for each product; Similarly, a stock index shows you the average change in the stock market, based on the most representative stocks, if you do not want to analyze separately the evolution of each stock.
There are ETFs with a simple but valuable strategy - simply to copy a stock index. In fact, there are studies that show that investing in an index brings, in the long run, higher returns than the individual choice of shares according to various opinions, strategies or recommendations.
Thus, at least at the beginning of your investor career, you can benefit from the performance of the most important shares listed on the stock exchange without worrying about their choice: you can buy an ETF and you will indirectly own the most representative shares on a certain stock exchange. . And for advanced investors, an index ETF offers a quick and easy way to diversify a portfolio of stocks.
