Investing in stocks and bonds for beginners - this topic is of interest to many who have not previously dealt with this industry. How to become an investor in 2021, trade securities on the stock exchange and receive passive income on the Internet? Where to invest money, what stocks to buy and where to buy stocks? Investments from scratch for dummies − this is the key topic of the article. Before buying shares, bonds, ETFs on the Moscow Exchange or other stock markets, make sure you understand the logic of investing. More on this later.
Market risks of investing are not as big as everyone thinks
The stock market for beginners, and not only, does contain risk. But losing money is not the most serious threat. The bigger danger is that people who don't have enough saved for retirement risk outliving their savings (if they have any) and facing a difficult financial life. Those who stick to safe investments may lose purchasing power due to inflation.
“Investing money seems risky, but not investing is even more risky, especially if you look into the threat of inflation. If you don’t grow your money, it’s difficult to live normally in the future,” says certified financial officer Petr Lazarov, co-head of investments at Plancorp.
Investments can strengthen capital and maintain purchasing power. To reduce inflation risks, do not strive for high returns. Just use the right mix and allocation of stable and risky assets. This approach will ensure portfolio growth without the risk of its complete depreciation.
Scammers
There are a lot of scammers, especially when it comes to times of crisis. Therefore, you need to be on your guard. The first may offer to invest your money with a profit of 300% per annum - this is a myth. If the promised return exceeds the Central Bank of the Russian Federation rate of 5%, this already indicates an increased risk. In this case, there is no need to count on a refund.
The second type is the purchase of magic signals, with the assertion that the expert knows where the market will move today, tomorrow or in a year. There is no “money” button, and you shouldn’t fall for it. There are always risks of misfire, especially if markets are volatile.
And the third type of dishonest work is the sale of additional services and products that are not profitable for customers. Therefore, you need to be extremely careful with offers from brokers, even if we are talking about a reliable company. These are most often not obligatory things for an investor, but a broker can make good money on them. At the start, it is better to refrain from unnecessary products presented by the company; with experience, the investor will be able to distinguish between a truly high-quality instrument and a money grab.
The stock and bond markets are quite extensive
Stocks and bonds are the main components of the stock market. Buying stocks is riskier than buying bonds. However, some stocks are less risky than others.
There are large and stable corporations that have been on the market for several decades. Among these: Johnson & Johnson, Microsoft, Ford Motors, General Electric, Procter & Gamble and others. For beginners, it would be right to pay attention to such companies in order to get a feel for a new business and practice. However, a large and established brand does not always have the same profitability potential as a new player. And here it is important to understand that the greater the potential return, the higher the risk. The task of a reasonable investor is not to make a bad choice and correctly assess all the prospects for investing in a company. We wrote in detail about how to do this here.
Bonds work in a similar way. Risky companies offer high returns, while safe borrowers (usually state-owned companies) offer lower returns. If you don't know much about stocks, bonds, and securities, read this article.
In your portfolio, use assets with different levels of return. No matter the situation, there is a mix of investments that will suit your goals and risk tolerance. Combine high-risk, high-yield stocks with more stable, safer stocks or bonds. Don't forget about companies that pay dividends.
Where are financial instruments traded?
An exchange is a platform that brings together buyers and sellers. At the moment it is electronic and no one is standing in a hole, as it was before. To gain access to the exchange and buy/sell assets, an intermediary is required. This is a broker. Or there may be other professional participants - banks. It is impossible to enter the market without a broker.
There is an over-the-counter market, when the seller and buyer do not want to pay a commission to the intermediary and carry out the transaction directly. These are risky things, for beginners this option is risky.
Issuer is a company that issues a financial instrument from the state. Gazprom is the issuer of shares.
Diversification
The stock market for beginners is no different with this rule. As stated above, you should engage in asset allocation (diversification). It's about how you divide your money between different investments. How you mix investments determines the overall level of risk in the portfolio.
With the right combination, you can control the volatility of the portfolio to a certain extent. You also have control over the level of return. High-risk portfolios contain a higher percentage of stocks than bonds. Conservative portfolios include 50% stocks and 50% bonds or allocate a higher percentage to bonds.
All stocks and bonds have different risk-to-safety ratios. To understand what mix of stocks and bonds and what proportion of them you should keep in your portfolio, determine your level of risk appetite.
Investing.com
On the main page at the top we look for “Investment Portfolio”.
Foreign site. But there is a Russian-language interface. The service is free. Supports most investors. instruments (even cryptocurrency). You can create several different portfolios. In different currencies.
Displays a graphical display of the results. Both the overall result and separately for each asset.
Lots of statistics on the portfolio and the assets included in it. Flexible settings for displaying the necessary information.
Of the minuses. No accounting for dividends.
Strategy against emotions
Buying and selling investments is one of the most important responsibilities of any investor. He should have his own system that will tell you when to buy and sell, and that will not allow you to panic and save yourself at the wrong time. In this regard, the stock market for beginners is no exception.
“Emotions will ruin you as an investor, whether you are a beginner, an amateur or a professional. Emotions will cause you to buy and sell at the wrong times in the stock market,” says Matthew Tuttle. A well-planned strategy will simply remove variables like fear or excitement from your investment success equation.
Vladimir Maslennikov, Vice President of the QBF investment group, has already told us about popular strategies in the Russian investment market. Listen to his advice.
Develop a calm attitude and a sensible approach to investing. “This means you understand what you are going to buy and when. This means you are aware of what you are going to sell and when,” says Tuttle.
Why you need to invest
Savings in hand make many people think about increasing them. Keeping money in a safe at home is not very profitable, because inflation can eat it up. Now is also not the best time to make deposits, since interest rates on them continue to fall following the key rate of the Central Bank. Naturally, in these conditions, the interest of Russians in stock market instruments is growing: according to the Moscow Exchange, currently in Russia 7 million private investors have access to the trading platform.
With investments you can:
- protect savings from inflation;
- get additional income;
- create a safety net and gain financial freedom.
Before you start investing, decide on your financial goals. At this stage, it is important to prioritize and evaluate the cost of your desires.
You don't need to keep track of time, but manage it
Trying to do something exactly on time, people sometimes find themselves in a stupid position. And this does not depend on whether you want to find the best time to enter or exit the market. The secret is that no one ever knows exactly what will happen and when.
“We observed that people were reluctant to invest in shares and redistribute them. They're concerned that risk scores are high,” says certified financial planner Jeff Nauta, principal of Henrickson Nauta Wealth Advisors. The truth is that stock markets have been trading at their highest levels for years, and you're simply missing out on big gains while you sit on the sidelines anxiously.
Don't wait for the right time. Instead, explore possible strategies and get to work. Set a goal to invest a certain percentage of your salary on a regular basis.
Skillbox
Website: https://skillbox.ru Cost: from 1,900 rubles.
per month Financial literacy
You will learn how to control expenses and income, use loans and government support profitably, and invest wisely . You will be able to draw up a personal financial plan to make a profit on investments or close loans faster.
What will you learn
- Control expenses and income Learn how to manage your finances and earn more than you spend.
- Create a financial plan Develop a strategy that will help increase income and protect your capital.
- Steadily increase your savings You will be able to regularly and without harming yourself save money for various purposes.
- Take advantage of government support Study useful government programs and learn how to return money spent using tax deductions.
- Don’t be afraid to invest. You will understand the investment processes and be able to choose the most profitable investment method.
- Pay off your mortgage faster Learn how to pay off your mortgage early and choose a loan without high interest rates.
Don't speculate
There are investors and there are traders. The investor invests money long-term (from 3-5 years) and stretches the strategy over a long time, receiving dividends and evenly increasing capital. The trader engages in speculation. He tries to profit from the stock's price fluctuations throughout the day by making multiple trades, buying and selling shares several times a day. Trading is a huge risk. And if you don't want to spend all day watching quotes, then this is not your method.
We do not recommend viewing the stock market as a game and an opportunity to make money quickly. Any kind of speculation is risky. They have nothing to do with the long-term investments we are talking about.
“High-frequency short-range trading (i.e. the work of professional traders) has minimal impact on ordinary investors. If an investor does not buy blocks of securities en masse, he does not remain in the red,” says Jeff Nauta.
Scandals and scams undermine public confidence in the stock market, but staying away from the issue and ignoring economic growth leaves ordinary people far behind in financial well-being.
“You can't think of any other way to turn $100,000 into $1,000,000 unless you have a really good printing press,” Tuttle notes with a smile.
Remember:
1. Invest and monitor inflation when choosing an asset to invest your money in.
2. Distribute your money across different assets.
3. Diversify your portfolio depending on the level of risk.
4. Turn off your emotions and stick to the strategy.
5. Don't wait for the right time to invest money. Save a certain amount for investment and act. The main thing is that it is not the last money.
6. Invest for the long term.
Where are the assets stored, what happens if the intermediary goes bankrupt?
Assets are stored in a depository, a company responsible for storing and accounting for financial assets. If a broker goes bankrupt, nothing happens, everything is recorded. The securities are transferred to another broker account.
A brokerage account for buying/selling is opened with a broker. Remote opening available. There is often confusion between a brokerage account and an individual investment account. IIS is the same as a brokerage account, but a variation of it that allows you to receive a tax deduction of 13%. Investments from scratch require patience and time from any participant, since there are many processes and stages that need to be analyzed and studied.
There can be only one IIS for a particular broker. The number of brokerage accounts is not limited.
Open education
Website: https://openedu.ru Cost: to be determined on the website
This course examines the main issues of the functioning of financial markets, the activities of financial institutions, and studies the financial instruments that a person has to encounter in his life.
In addition, the basic principles of investing available funds in the financial market and the basics of financial calculations are revealed. You will learn how financial markets and financial institutions function. How companies attract capital for their development, as well as how to invest in the financial market.
This course examines global transformations that transform financial markets, involve new institutions in financial circulation, contribute to the emergence of new financial instruments, and change approaches to regulating financial markets.
Currently, companies, regions and the state are actively using the financial market to attract financial resources to ensure the implementation of investment projects.
The financial market is in demand both from financial institutions and private investors, who use it to invest temporarily free funds in order to generate income on invested capital.
The financial market is very dynamic and undergoes significant changes. You will consider the most notable recent events characterizing the development of the global financial market and the Russian market in particular, among which it should be noted:
- a series of financial crises that shook the global financial community and forced investors to more sensibly assess investment risks;
- globalization of financial markets, which blurs the lines between national markets and promotes the integration of the Russian financial market into the global financial system;
- intensive development of securitization processes of financial markets and assets;
- development of financial engineering and the emergence of new financial instruments.
The course consists of short video lectures ranging from 8 to 15 minutes in length, with non-graded questions embedded within. Each week there will be a 20-question graded test.
A student's final grade is based on weekly tests, all of which are weighted equally, as well as a final test.
Smart-lab
Official website - smart-lab.ru.
One of the oldest services for investors and traders. This is a whole social network for those interested in investments. There are a lot of reviews, forums, news content, and chats.
Main advantages:
- The service is free.
- Blogs of private investors.
- A good base of financial indicators for conducting fundamental analysis of domestic issuers.
- You can compare companies based on current multiples.
- It is possible to view the portfolio structure broken down by securities and sectors.
Of the minuses: a rather complex interface and a lot of unnecessary information, which will have to be filtered for accuracy due to the fact that the content is created by the users themselves.
Finarium
Website: https://finarium.pro Cost: to be specified on the website
The course program is designed primarily for those who are just taking their first steps in investing and getting acquainted with various types of assets, their properties and risks.
Course "Investing for Beginners". The most important thing a novice investor needs to know.
The purpose of the course is to familiarize yourself with various types of investments and prevent common mistakes for beginners.
By completing this course, you will learn:
- Distinguish between investment and speculation
- Choose the safest types of investments
- Understand the risks associated with investments
In addition, you will understand the basic principles of passive and active approaches to investing. You will learn about the risks and returns of the main types of investment assets: stocks, bonds, real estate, deposits, precious metals, etc.
Investment portfolio is another important concept that a novice investor should become familiar with in detail.
The course consists of 10 lessons. Each lesson includes video material and several test questions that will help test your understanding of the materials.
Open a deposit with an interest rate of 8-9%
Deposits are the least risky investment option and are suitable for inexperienced investors. Select the most advantageous offers from banks, taking into account the amount and investment period:
- “Special” in Renaissance Credit - 7-8.5% of 30,000 rubles for a period of 91, 181, 271 or 367 days;
- “Absolute maximum” in “Absolut” bank at 8.5% for 367 days;
- Bank Otkritie up to 8%;
- “Seasonal” at VTB24 up to 10% for 7 months;
- “Investment deposit” from Rosselkhozbank at 8.15% per annum for 180 or 395 days.
- Gazprombank “For the future” 9%
- Uralsib “Right decision”, 9%.
- Sovcombank “Record percentage with Halva” 8.8%.
- Promsvyazbank "My Strategy" 9%.
Lecture course by Aswath Damodaran on YouTube
Website: https://www.youtube.com Cost: free
Aswath Damodaran is one known in the investment community for his work “Investment Valuation”, which has become a reference book for many investors and professional appraisers.
Author of a well-known book about investments, the stock market and individual valuation.
It is quite complex and is unlikely to be suitable for beginners, but the course of lectures turned out to be more understandable. And yet, it will most likely be useful to those who are already familiar with equipment and have average to good knowledge of finance.
Blackterminal
Official website - blackterminal.ru.
Paid service with good analytics and complete up-to-date information. When choosing a professional package (price - 4990 per year), the user gets access to all available options:
- Reporting and multipliers.
- Analytical reviews.
- Dividend history.
- Dividend Notices.
- Accounting for investments in 10 portfolios.
- Unlimited number of assets in the portfolio.
The service also offers a free basic package with analytics, taking into account investments for one portfolio of 7 assets.
Top 6 questions and doubts for beginning investors
How to save if I don't have money?
Start with 10% of your salary.
For example, your salary is 20,000 rubles. Set aside 2,000 a month. If you can’t, set aside 1,000, or 500 rubles, but start with something.
Let's calculate: how much we will get in a year and 3 years if we put aside a certain amount every month into a replenished account with capitalization of interest in the bank.
| If you save per month | Bank rate | Amount after a year, rubles | Amount after 3 years, rubles |
| 500 | 6% | 6 729 | 20 365 |
| 1000 | 6% | 13 459 | 40 730 |
| 2000 | 6% | 26 917 | 81 460 |
Is it difficult to save large sums?
Then let's play a game that is great for developing the habit of saving, doing it gradually. Moreover, if you play not alone, but with someone, it increases excitement and control.
So, the rules are as follows: starting from the New Year, every day you put aside an amount equal to the number of that day in the year into a piggy bank account. That is, January 1 - 1 ruble, January 2 - 2 rubles... February 5 - 36 rubles... June 20 - 201 rubles. Thus, the maximum will be December 31 - 365 rubles per day (in Moscow this is not enough even for coffee and a sandwich), but by December you will already be an experienced “hoarder” with a developed habit.
In total, by saving from 1 to 365 rubles per day for a year, you will have an amount of 66,795 rubles. Surprised?
Another option: put aside 100 rubles every day - this is the price of a cup of coffee at McDonald's. It’s easy to calculate that in a year you will accumulate 36,500 rubles.
If you can’t save even 100 rubles, start with your education. Nowadays there is a lot of educational materials in the public domain on many promising professions. Take the time, learn, and start earning more than you do now so you can save.
How much can you earn?
Let's assume that by saving on a cup of coffee a day, you saved 36,500 rubles and invested it in stock market instruments. Average returns with minimal risks (that is, the most conservative portfolio) will bring you 10-15% per annum. If you are afraid of everything and buy only OFZ, you will earn 6%, and purchases on IIS will increase your profitability.
Based on a return of 15% per annum, and a deposit of 36,500 rubles, in a year your brokerage account will be 41,976 rubles - this is without any capitalization and reinvestment. And if you continued to save 100 rubles a day, then in a year you will deposit an additional 36,500 into your account. A total of 78,476 rubles, saving only on coffee. After 3 years of such investments, the amount will be about 200 thousand rubles. During this time, you can improve your level of financial literacy and start using exchange instruments with greater profitability.
What is important to remember:
- The stock market is not a cornucopia. There are no miracles here. You cannot enter the market with 10,000 rubles and become a millionaire in a year. A return of 100% can, of course, be achieved, but this is an accident, not a rule.
- It is impossible to estimate in advance how much money you will earn. You can focus on average returns over long periods of time, but they are not guaranteed. Obtaining a certain return in the past does not guarantee the same level in the future. The exception is OFZ - here everything is known in advance, but the profit percentage is low.
- The market is risk and uncertainty. The higher the risk, the higher the return.
Can I lose everything? What if I buy the "wrong" stock?
You can, although you will have to try. In 2008, an experiment was conducted in which a monkey chose stocks. She “assembled” a portfolio of shares of Russian companies (choosing cubes at random). Over 10 years, the portfolio grew 7.5 times, outperforming investment funds in terms of profitability. By the way, in 2009 a similar experiment was repeated with a parrot. And after that, do you still think that you won’t succeed?
To protect yourself, invest only amounts you are willing to lose in high-risk instruments. If you are not ready to lose a single ruble, do not buy risk. Buy OFZs and blue chip stocks. Even if a broker goes bankrupt or his license is revoked, which is extremely rare, you can safely transfer your assets to another broker.
The stock exchange is a casino, there is only deception all around
If you are not dealing with Forex brokers, but with licensed companies operating in accordance with the law, then your investments are protected no less than bank deposits.
And it’s not much like a casino: here price movements are determined by the laws of the market, under the influence of macroeconomics and geopolitics. Not counting the times Trump negotiates with the Chinese on Twitter.
I don't have any special education, I can't handle it
Investing is indeed a little more complicated than simply depositing money, but it is not so difficult that you cannot handle it.
You don't need a financial background to understand how the market works. The main thing is to have the desire to figure it out. Start getting interested in the topic of finance: read bloggers, books for novice investors, listen to free seminars.
By the way, some brokers have free training and channels where they talk about investments in simple language. A free investment course for beginners from Tinkoff magazine or courses from the broker Finam, there are both paid and unpaid options.
Watch financial reviews and forecasts - this can be conveniently done in different channels:
- Income @dohod – telegram channel of analysts who publish about the economy and the stock market,
- Dividends Forever - telegram channel @divForever and the group of the same name on VKontakte of Larisa Morozova, a famous retired investor who lives on dividends. She shares her market strategy and a lot of useful information on Russian companies,
- MarketsMoneyPower @AK47pfl is a telegram channel where investment ideas and their rationale are often published. There is no need to copy them; it is important for you to understand the logic of processes in the market.
- The Harmful Investor is a Youtube channel where complex stock exchange concepts are explained in simple language in a nutshell and companies are sorted out.
- Red Compass is a stock exchange school that teaches investment and finance.
Please note that under almost every article you will see the inscription “Not a recommendation for purchase” and this is true - the final decision on the acquisition of assets is made only by you, since responsibility for your finances lies only with you.
I'm afraid!
Open a demo account in the application of any broker that allows it, and just practice - Sberbank Investor, BCS My Broker, VTB My Investments, Finam Trade. Look at what information there is on companies, what is happening with stock prices over the course of several days. Try to make a deal. We assure you, everything is not scary at all!
"FINAM"
Website: https://www.finam.ru Cost: from 2900 rub. per course
Online course “Beginner” - 5-day training in investment business from teachers with many years of experience.
You will be taught how to select securities, analyze them competently and formulate an investment strategy in accordance with your goals.
In 5 days you will learn:
- How to select securities by analyzing charts, news and business financial statements.
- What are trading indicators and how to use them.
- What are the investment methods? How to make money not only on the growth, but also on the fall of securities.
- How to keep a cool head and not trade on emotions.
The course is taught by teachers with successful author strategies and publications in the media. The teachers are practicing traders who have been trading on the stock exchange since the 90s. They have experienced financial crises on their own capital, and therefore their knowledge is confirmed by practice in real conditions.
Thousands of grateful students graduate every year. Here they take the process seriously and teach stock trading responsibly.
As a result, the Beginner training course is recommended by consultants from other investment companies.
"Universarium"
Website: https://universarium.org Cost: to be determined on the website
The course was created in order to gain knowledge about the basics of the financial sphere of modern society, improve the financial literacy of everyone who cares about their future and the future of the younger generation.
This course will try to answer “simple” questions about finance. How to set financial goals? Why are banks needed and what function do they perform? What are investments and how to evaluate them? Risk and return on investment. What is intellectual capital and financial capital? Money and functions of money. What is the value of money? What is the state budget and why do we pay taxes? Why do you need insurance? Where to get money from and how to choose a profitable loan? Modern bank loan products. Where to invest money? How to use different types of deposits? Types of securities, how to make money in the securities market? What are mutual funds?
The projects are aimed at increasing the level of knowledge about financial products and services, including for young people.
Moscow Exchange School
Website: https://school.moex.com Phone: Cost: free
Nowadays we often hear and see various advertisements of financial companies, ways of making money by trading on stock exchanges, that finance is difficult or finance is very simple.
How to make sense of all this?
At the webinar you will learn about existing financial tools and how to use them in the family budget. Is it difficult to invest at all and is it necessary?
The webinar will be useful for beginners, where and how to start. For those who want to get to know the world of finance and learn how to invest, who want to know what investment tools are available and how they work.
What you will learn:
- Set investment goals;
- You can create your own risk profile;
- What you need to draw up a financial plan;
- Find out what financial instruments are available and how they work.
Harvey-invest
Website: https://harvey-invest.com Phone: Cost: from 24999 rub. per course
Learn to invest in 10 video lessons.
Course objectives:
- Increase the financial and investment literacy of novice investors
- Share Andrey Sokolov's investment experience, which is 12 years
- Provide high-quality knowledge that is necessary for successful investing in securities and other instruments
- Help those affected by the crisis
- Help to master the new profession “Investor in the financial market”, accessible to everyone
On the course you will cover:
- Laws and rules by which the financial market operates, which will help you quickly move on to the practical part
- How to competently analyze the market in the short, medium and long term
- By what parameters and indicators should you select securities for your investment portfolio?
- Investment strategies tested on the personal experience of Andrey Sokolov
