Have you been reading about the rise of DIY investing? Starting to feel left out?
It’s an understandable feeling, and you’re not the only one. A combination of factors have upended many traditional notions about investing and brought millions of new people, many of them middle- and even working-class, into the world of investing within the last two years.
Those factors include the rise of low- or no-commission trading apps like Robinhood and Stash, which have made it possible for people with small amounts of capital to buy stocks or even portions of stocks from many of the biggest and most valuable companies in the world.
And then there’s the pandemic. While there’s no doubt millions of people around the world lost their jobs and struggled to make ends meet, there have also been millions of people who were able to keep their jobs, often working remotely. Stuck at home, saving money from the inability to go out, and sometimes simultaneously receiving government assistance, many of those people decided to start trading for the first time.
But as most experienced investors have pointed out, successful investing isn’t just about having the money and the time — you also need to have the knowledge. Those who make time to learn and do their homework may find themselves in a better financial situation than they could have imagined just a year before. But for the majority of casual, DIY investors, the long-term picture is unlikely to be rosy.
If you’re investing and feeling like you need some knowledge to improve your chances of success, here are a few suggestions on how to boost your understanding of the stock market.
Read some books
We’ll start with maybe the most old-fashioned form of learning there is: books!
Yes there are of course many online courses (and we’ll get to those), but for a solid foundational understanding of a subject, there are still few methods more helpful than reading a good book.
For a solid front-end tutorial, check out The Neatest Little Guide to Stock Market Investing, by Jason Kelly. There are plenty of options out there, of course, and you might find a different book that’s more in line with your personal approach or needs. If so, go for it!
But Kelly’s book is a perfect way to learn the absolute basics of trading and the stock market, including how to create both short-term and long-term plans, and the layman’s understanding of how making money through trading actually works (spoiler alert: it’s more complicated than you might think).
Take some online courses
Okay, we get it. For some of us, the thought of reading a book is like being asked to do the dishes or use dial-up internet — it’s not going to happen.
That’s fine. Different strokes for different kinds of learning. If you’re a thoroughly modern person looking for online learning, the choices are vast, but The College Investor’s online video courses, especially Investing 101, are a fun and educational way to learn the ins and outs of trading. Some of us are visual learners, and The College Investor’s videos are full of colorful and well-executed visual aids to help make sense of all the numbers.
However, not everyone needs the raw basics. If you’ve already been investing for a year or so, and feel like you need some more intermediate and advanced training, check out Certus Trading, founded by entrepreneur Matt Choi, who takes a personal approach to teaching trading.
Here’s the conclusion of Fine Tuned Finances review of Certus Trading: “We found the overall approach by Certus Trading to be both honest and helpful. It may not be for everyone, but if you want to really educate yourself on the markets, Certus Trading is a worthwhile option to look into.”
Peruse some forums
Okay, so this one is likely to be a bit controversial. The use of online message forums for trading advice has become so ubiquitous over the last few years that “Reddit investor” is now a commonly used phrase — albeit a derogatory one most of the time.
And yes, we’ll add the disclaimer that you should be extremely careful about what you take away from online forums, which are filled with people who sound smart but may not have any real idea of how to trade successfully.
That being said, some online forums can really be helpful, especially if you just want to interact with other investors, discuss their strategies and ask for feedback on your own. US News & World Report compiled a great list of well-regarded trading forums you can check out here.
There’s so many ways to learn these days, about nearly everything. The important thing is to commit yourself to that learning, however you prefer, and make a daily habit of getting better. There are lots of tools out there. Find them, use them and best of luck in your trading!