INVESTING IN STOCKS FOR BEGINNERS
The word “investing” is a word that is not used as much as it used to be. When I first learned about investing in stocks for beginners, I was taught that you bought a companies stock because you wanted to own a piece of something that would do well in the future.
I always questioned whether buying stocks wasn’t just another form of gambling. After all, any stock you buy today can go down tomorrow (and it often does). With companies like Enron and others that have been devastated with financial scandal, investors don’t really have a good idea of what they might be getting into. How was that different from gambling I asked?
In response to that, my father always told me that buying stocks is much different than gambling because you can find out a lot of information and make intelligent decisions. He said that he was betting on the future of America rather than the roll of a dice. His investing dollar was added to and helped companies succeed, for without people to buy stock, businesses would not have the capitalization to do business and would fold.
Investing is a word that is usually used to refer to money being used to make more money over a longer rather than shorter period of time. This is completely arbitrary of course, but you rarely ever hear someone say that they are “investing” in a horse for a horse race. Things that you put money on for only a very short period of time, whether it be for gambling or day trading, are almost never referred to as investments. Investments are something that you buy into or purchase for a longer duration than a mere minute or hour.
Not as many people seem to invest in the stock market today as they used to. Just 20 or so years ago, you could buy a blue chip stock or some other company that you felt confident about, and put it away for 5, 10, or even 20 years. You could feel confident that the stock would be higher than it was when you bought it many years ago. The words “buy and hold” were often used then and are rarely heard now.
That no longer seems to be the case as the Dow Jones and other indexes go up and down with enough fervor to give many of us whiplash. Buying stocks online has given us the ability to get in and out of stocks quickly with little cost and it has spawned a different attitude toward stock trading. Value stocks are less interesting than they used to be because they won’t be the ones to give you a quick return and you may have to wait months or even years for those to show a positive return.
Investing in stocks has just become less prevalent now in this day and age of the quick hits. People like to get in and get out as quickly as they can and show a profit for it. Trading stocks for beginners is something people want to learn rather than “investing” in stocks. Some of this may come from their fear of something bad happening as we have all seen over the last couple of years. Unfortunately, much of the money that actually was “invested” with pension plans and 401 K’s was lost in this bear market. Many people’s investments have been lost because they were buying and holding.
Ultimately though, the way we have come to buy and sell stocks online has changed the way we think of investing in the stock market. We see it as a more temporary vehicle that we have to pay attention to frequently. Just one bit of bad news can send a stock tumbling down overnight and because of this, we are all a little more scared to actually “invest” in stocks than we used to be.
