When you think about investing in the stock market what’s your immediate reaction? Professionals in pin stripe outfits, complicated algorithms, big corporate wheeler dealers, far too complex for little old me? Well, with the help of Warren Buffet and Peter Lynch I am here to prove to you that not only is stock market investing achievable for everybody, it is fun, rewarding, engaging and essential if you want to change your life. In this blog, Stock Market Investing for Beginners- Where do you Start?, I’m going to explain the simple process of setting yourself up to start investing in the Stock market but before we get stuck in, just take a look at this picture.

Just spotted this report on the BBC website this morning. The picture that paints a thousand words. All the people that this report refers to are highly educated, highly intelligent and highly capable individuals and yet they overspend, live in constant debt and are stuck in the rat race. They don’t have time to realise that by implementing better money management techniques their lives could be free from exhaustion and burnout. And it couldn’t be easier. No more wading through financial almanacs spending hours in libraries. The Internet brings you everything you need straight to your living room. All you have to do is set it up.

Stock market investing-What do I need?

Equipment and resources that you will need fall into two categories; Hardware and Software. The hardware side is easy enough. You will need either a laptop/desktop computer, smart phone and/or a tablet device. Oh, yes and access to the internet. That’s it.

From a software point of view you will need 3 websites. Investing is like buying a new washing machine. When you buy a new washing machine you do some research first ( drum size, quality, functionality, spin speeds etc), then you shop around for the best price and then you go to the store and make your purchase. Buying shares in companies is exactly the same process. You do a little bit of research first so you will need a research website, then you wait for the stock market to give you a cheap price so you put the companies you are interested in on a watchlist (that’s website no 2) and then when you are ready to buy you will need an online broker account to execute the transaction for you ( website no 3). Let’s look at each one in a bit more detail.

The Research Website

There are many to choose from but I use Stockopedia. As you can see from the image it tells me everything I need to make an informed decision from sales and profits, debt levels, health and potential bankruptcy triggers. This is a paid site but with the amount of detailed information it provides it’s worth every penny at approx £300 for the UK region. Don’t worry about understanding all the detail for now, just know that these sites exist and you have access to all the information you need.

The watchlist website

Once you’ve identified some companies you’d like to invest in you have to wait until the Stock Market offers you a reasonable price to buy. Whether you are buying shares in a company or socks you should never buy overpriced goods. In his book ‘the Intelligent investor’ Ben Graham likened the Stock Market to a manic depressive salesman called Mr Market who offers shares for sale every day. You just have to wait until he gives you a cheap price to buy which is why you need a watchlist.

The online Broker website

Individuals cannot access the stock market directly, they have to go through a broker. Online broker accounts are free to setup and are easy to use. You transfer money into your account and then ask the broker to buy and sell shares as per your request. This is my online screen detailing my portfolio valuation on the left and action buttons on the right. Couldn’t be more straight forward.

Stock Market Investing for Beginners-What else do I need?

As you can see the process to set yourself up is so easy it will take you less than half an hour. What you need to know now is what to buy and when to sell and for that you will need an understanding of how the stock market works, an understanding of the lifecycle of a company, some jargon busters to build your confidence and a strategy that meets your investing style, aims and goals. Let’s get started. Coming up in my next blog – How does the Stock Market work?