What is an investment and why do people invest ?

An investment in basic terms is the purchase of an item to generate a profit in the future . The financial world looks very confusing at first , all the numbers and indices can be a slur. The best way to look at the stock market for example , is to think of a stock as a part of a business, and buying stock simply means you own a small amount of this business. This price of this stock will either go up or down due to internal and external factors . To make a profit, the price of this stock you bought must be higher than what you initially bought it for, which is called capital gain. Sound confusing? Don’t worry, most people also find it difficult to wrap their head around. That’s why we have developed the Youth Investment Group to give people who are not in finance the same opportunities and benefits. Follow our articles from beginner, moderate, to advanced trading tips and strategies .

How do I start investing?

The difference between becoming successful in the financial markets and failing is having the resilience to learn from your mistakes and to keep a cool head. Too many times the average investor that has no real experience will buy a stock or derivative for no real reason. As soon as they see they are losing money, they may panic and sell, turning an on paper loss to a real loss. We recommend putting in the hours on a practise account such as the ASX website or Plus 500, that gives you 50k in practice funds to experiment. In our opinion, doing this for a month or two before beginning to invest is a smart idea. Once you have gained some virtual experience, you may find it difficult to pick a stock or derivative that suits your return plan . Plus 500 is great for short term turn arounds however it can be volatile as the prices on FOREX bounce around every second! If you want slower but less risky returns, ASX may be your place. I started on ASX when I was 16 and turned $3000 savings from delivering pizzas to $3500 in a couple months. ASX companies are great, as some such as Telstra pay dividends twice a year, which I used to buy more shares in Telstra. Investing can be confronting, however putting the right steps in place, you can easily let your money work for you.