HOW TO INVEST YOURSELF IN THE STOCK MARKET WHEN YOU ARE A BEGINNER?

How to invest oneself in the stock market when one is a beginner?
First of all, it is nowadays quite accessible to manage one’s own financial investments thanks to e-banking. However, you need to know where to go and how to proceed. Invest Yourself has developed its own semi-passive investment model. This model is based on a varied investment portfolio mainly composed of equity funds. Invest Yourself shares its investment portfolio, its lists of the best funds and its buy/sell decisions with its Members.
But first of all, here are some useful steps to take into account when you decide to get started:
1. DEFINE THE TOTAL AMOUNT OF MONEY YOU WANT TO INVEST
When you decide to create your investment portfolio, it is necessary to evaluate the amount you are willing to invest. This amount should exclude the money you want to use for other purposes in the future. The recommended investment horizon for funds is usually 5 years.
This excludes any expenses and large purchases that you may need to make in the short to medium term. For example, costs for renovations to your home, the purchase of a car or major equipment.
It is also a capital with which you are ready to take a risk without putting yourself in financial difficulty. Indeed, the funds do not have a guaranteed capital and there is always the risk of losing part of your capital. However, the diversification provided by the funds allows you to reduce this risk significantly.
2. CHOOSE THE CATEGORIES OF FUNDS IN WHICH TO INVEST, AND THE ALLOCATION OF YOUR CAPITAL
When you decide to invest in the stock market yourself as a beginner, it is important to be aware of risk management. This means not putting all your eggs in one basket. In other words, it is a matter of diversifying your financial investments in order to reduce your risk in case of unfavorable market movements.
According to this principle, your investment capital defined above, i.e. 100%, must be divided between your different types of investments. This distribution of your capital corresponds to your risk management.
For example, at Invest Yourself, we choose categories of funds representing large markets. We then choose the funds we buy/sell in these selected categories. When you are an IY Member, we explain how we allocate this capital to the different fund categories. You will also find the IY portfolio showing the funds we are invested in and the percentage invested in each fund. In addition, we also publish our selections of the best funds by category. In addition, Invest Yourself also provides its members with a portfolio management template. It aims to help you manage your investment portfolio on a daily basis, including your buying/selling decisions.
Below, you will find an illustrated example of an investment portfolio of 5000 EUR. It includes the funds you are invested in and includes your currently uninvested cash.
3. OPEN AN INVESTMENT ACCOUNT
First of all, you just need to become a client of the online bank you are going to use to manage your transactions by creating a new client account.
To do this, you can go to the page: “Which bank to choose to buy funds? Comparative table”.
Once your client account is opened, you need to open an investment account (or securities account) on your online bank’s website.
When you open your investment account, your bank may ask you questions about your investor profile. This includes your experience and knowledge of investments (e.g. what is a fund, a share, a bond,…). This information is part of the European MiFID regulation. It often takes the form of a self-assessment (e.g. you have to rate yourself on a scale from 1 to 10). The questions are usually more thorough if you open an investment account that seeks advice from a bank manager, rather than opening an investment account managed by yourself independently.
Some banks require you to deposit money into your investment account in order to invest, while others allow you to draw directly from the current account. Opening an investment account is free of charge, as is opening a current account linked to your investment account.
When you sell a fund, the money will be made available either directly on the current account or on the investment account. In the latter case, you can transfer the amount to your current account without any additional fees. Here are the procedures to follow in the 3 banks where we carry out our transactions.
4. BUY A FUND
There is nothing easier than investing in the stock market as a beginner. In the search engine of your bank, you just have to find the fund in which you want to invest. To do this, you can either use the ISIN code of the fund or enter the name of the fund.
You then need to enter the amount you wish to invest, either the number of shares you wish to buy or the total amount.
The banks allow you to make an estimate/visualization before validating your purchase.
It is also important to take into account the fees related to the fund you are going to buy. You can consult the page: “What are the fees related to buying and selling funds?”
5. WHAT DOES BEING A MEMBER OF INVEST YOURSELF MEAN IN CONCRETE TERMS?
Invest Yourself gives you access to IY Portfolio updates, in-depth explanations of the IY Model, buy/sell decisions, and our selections of the best funds by category.
Twice a month, you can receive by email the ActuShot, your 2-minute digest of market news. This news digest contains the major information impacting the management of your investment portfolio, the IY Portfolio updates, as well as the list of events in which you can participate.
You can also subscribe to Groups based on your interests or learning needs. The purpose of a Group is to ask questions and seek advice from other Members who have subscribed to the Group, as well as to share information that may be useful to the Group based on its topic. The existing Groups are currently the following: General News, Ethics, Portfolio Management and Practical Basics. Invest Yourself also regularly organizes virtual Intercoaching sessions that allow members to exchange information and review their personal investment strategy. Ideal when you decide to invest in the stock market as a beginner!
The “Practical Basics” page gives you practical explanations of certain terms, procedures and conditions related to financial investments, as well as the banks where we buy funds.