It may seem simple to take your money and put it in the stock market, waiting for it to generate revenue. However, stock investing can be difficult and make you waste your money due to its volatility and deciding to place your money.
An example of this is considering many retail investors, who aren’t investment professionals, and lose money every year. While there are many reasons for this, every investor who has a career other than the investment market understands that they don’t have the time or resources to do extensive research on all of their stocks, which naturally leads to losses.
They also don’t have a team of research professionals to assist them with this daunting task, and it can be challenging to keep up even if you dedicate a few hours every day.
This is why this is the first fact you must know about stock investing: if you don’t do enough research, you’ll wind up making losses.
You can reduce your losses and the amount of research required by investing by focusing on key factors. But before that, make sure you understand how stock investing works properly and what it is above all.
Many beginners decide it looks quite simple, but investing is more than just predictions and considering today’s market. Therefore, let’s start with the simple before jumping to the things you must know.
What Is the Stock Investment & Market?
The stock market refers to a variety of things and exchanges that allow stocks to be bought and sold. As it is commonly known, the stock market refers to the sum of all publicly traded stocks that can be purchased on any exchange.
Stocks (also known as equities) are securities that give shareholders ownership rights in public companies. You have a stake in the company, and if all shares are owned, you can control the way the business runs.
You can still direct the company’s operations even if not all shares are owned as you will see in the film, boardroom battles and since most stocks vary of owner and are determined by who owns the most. However, this doesn’t leave you without any authority.
Now, the common question: from where does stock come?
Public companies issue stock to help them finance their businesses. Stock is issued to investors who believe the business will succeed in the future.
Shareholders get dividends and any appreciation in shares’ prices. If the company runs out, they can watch their investment shrink or disappear completely.
The stock market is a type of aftermarket where shareholders can sell their shares to interested buyers. The stock exchange is where this trading takes place, such as the New York Stock Exchange.
Trades used to be done on the floor of an exchange, but today almost all transactions are conducted electronically.
How Does It Work in Specific?
The stock market allows investors and brokers to trade stocks for cash or vice versa. Anyone can buy stock by going there to purchase whatever is available from the stock owners. Sellers may expect their stocks will fall, but buyers are hoping for them to rise.
The stock market allows investors to bet on the company’s future. Investors determine the value of a company by the price at which they are willing to purchase and sell it.
Following the previous explanation, stock prices fluctuate depending on how many shares are demanded or sold. Still, the market over time evaluates companies based on their business results and prospects.
They will rise if a business is growing in sales or profits. However, stocks that are declining will most likely fall over time. But, in the short term, a stock’s performance is largely dependent on the supply and the demand in the market.
Private firms may decide to sell stock or raise cash when they see which stocks are most popular with investors. An investment bank will sell shares to investors, and they’ll conduct an Initial Public Offering (or IPO). Investors can then sell their stock in the stock exchange if they wish, or they can purchase more stock at any point during the stock’s public trading.
But What Should You Consider?
Entering the facts, you should keep in mind, we want you to know there’s no specific number of things you should know. On the contrary, they will be adding all the time as investing in stock changes despite the principle of how it works the same.
With this in mind, we’re confident we can start discussing the important matters to introduce you to the actual steps later to get started on this money-making option.
You Can’t Think Short Term
Short-term trading is not just a losing proposition for investors. Automated trading platforms are better at selling shares than the average ones, which is why you need to approach this option as a long-term opportunity, not a short-term one.
If you don’t believe us, keep in mind there are better opportunities when a stock or sector gets dismissed by the markets and remains stagnant despite stable economic results that will generate a steady stream of profits. Railroads and airlines have experienced long periods of out-of-favor, but they continue to make significant gains when the economic and industry conditions are right.
A series of bankruptcies in airlines but also other niches and businesses have hit in different eras or years, but many companies have remained strong due to how they have managed their stocks over time.
What does this have to do with your investment? You need to make sure you are working with your options carefully and investing when it is only possible and brings a long-term benefit, not only a short-term one, as this is not the best option for actual earnings.
Dividends Are Your Friends in the Industry
It isn’t a secret that big companies’ stocks and prices drop every now and then. How do they make it out “alive” from these moments?
To make this a bit more visual, Apple’s share prices dropped from $110.38 in 2015 to $105.26. This is an 11% decrease, but investors who held the stock for all of 2015 lost only 3%. Why? Apple paid $2.03 in dividends during the year.
While dividend-paying stocks can still be subject to declines, they offer some protection that others do not. To be aware is that those rich dividends are not always guaranteed to last.
Many investors are fondly interested in a statistic showing that the majority of the S&P 500’s annual returns have been from dividends and not price appreciation. Some experts on the topic have quite proved this.
Thus, learn as much as you can in this matter while doing your stock investment research.
This Isn’t Perfect
Both professional and amateur investors have their preferred measures of value and growth, from price-earnings ratios and dividend yields to profit margins and profit margins.
No number can distinguish good stocks from poor ones, which leads us to the main reason behind the subheading: this isn’t perfect because you are bound to lose money more than actually earning it.
Stocks that look cheap at 10x earnings can jump to 5x in a flash. A flashy startup in tech can quickly jump to 6 if it is priced at 3x sales. It is kind of a bet, and your research and observations will only lead you to read the market a bit better.
However, guaranteeing you will always make money isn’t possible, and you need to think about how you are going to handle this ‘issue’ in the stock investing option.
Expensive or Cheap: It Is Hard to Tell
A stock’s price per share is not enough to determine if it is worth buying.
The common example to understand this is to know that a share that is worth, we don’t know, $200? It doesn’t mean it is actually expensive or cheap. However, a share worth $5-10 isn’t cheap either.
Triple-digit price tags may be too expensive for new investors with limited funds. However, buying 100 $1 stocks is not necessarily a better strategy, and this is the most common example and a mistake by new and even old investors.
If there’s something, you must remember, consider investing as grocery shopping. You should bring a list to help you choose what products to purchase, not just price tags.
Taxes Can and Will Take A Bite Out of Your Profits
Many stocks had a fantastic run in 2015, which made some people new millionaires when investing in the stocks. However, tax-wise, any investor has lost a lot based on taxes and how they influence your yearly purchases.
A short-term capital gain is a sale of stocks that you have held for less than one year. This income is taxed as ordinary income. This could result in someone paying anywhere from 25% to 39.6%.
If you hold the stocks for at most 12 months, the tax rate will drop to 15% in most tax brackets. This is basically a trick to consider when investing to ensure you get the most out of your investment.
Otherwise, it is common to lose most of your profit due to taxes percentages and required payments.
Be Clear About What You Want & Pay for
Although the brokerage industry is constantly evolving, many competitors are offering the best trading options. However, most investors can find the basics anywhere.
You should be aware of the type and price of the buy or sell order that you are entering. For example, a market order will execute the transaction as quickly as possible regardless of the current market price.
However, a limit order will only complete the transaction within the price parameters that you have established.
This is when we enter research once more but also confidence and clarity. Are you sure about what you want in this investment? Also, do you know how much something is really worth? How much are you paying for it?
Be clear about every single part of this option, and make sure you’re confident about what you’re doing and how much you’re investing in it.
Pay Attention to the Chart
There are many types of stock charts. These charts include bar charts, line charts, and candlestick charts.
The latter are those that are used both by fundamental and technical analysts.
It can be difficult to read these charts, and it takes time to learn how to understand them properly to actually say you know what you’re doing and don’t end up losing all your money.
What does this all mean for investors? This step is not something you should overlook. This is because chart reading is crucial at the beginning and end of your investments.
A good investment chart should start at the lower left and end at the upper right. Don’t be alarmed if the chart moves in a downward direction.
You can choose from many stocks, not one that will lose money. You can put this stock on your watchlist if you believe in it. Then, come back to it later. Many people believe that stocks with scary charts are worth investing in, but they also have the research time and resources to do so.
Dividends Once More
Dividends are a great option if you don’t have the time to monitor the stock market daily and want your stocks to earn money quickly. Dividends work in the same way as interest in a savings account: you get paid no matter what stock price.
Dividends are a distribution made by a company to shareholders as a reward for its profits. The board decides the amount of the dividend and issues it in cash. However, some companies may issue stock shares as dividends.
As we mentioned earlier, they are important for many investors as they provide steady income. They are usually issued at regular intervals, most often on a quarterly basis by companies. Traditional investors love to invest in dividend-paying businesses. These companies can provide security for investors in times of economic uncertainty.
Large companies with predictable profits are likely to pay the best dividends. Oil and gas, financials, banking and financials, basic material, healthcare, and utilities are some of the most popular sectors that pay dividends.
High-quality stocks can pay dividends of up to 6%. Startups and companies in their early stages may not be able to pay dividends yet because they are still young.
Before you buy stock shares, make sure to check the company’s dividend rate. You can simply invest in stocks that pay a high dividend if you don’t want to put money on the market.
General Risks and Considerations
Individual investors can own shares in the best companies around, which can prove to be very lucrative. Stocks are a great long-term investment if they are purchased at affordable prices. The S&P 500 has, for example, generated a 10% annual return with a nice cash dividend.
Long-term investors also have a tax benefit from investing in stocks. You won’t have to pay any taxes on gains as long as your stock isn’t sold. Only dividends and money you receive will be subject to tax. You can keep your stock for as long as you like and not pay any taxes on the gains.
However, capital gains taxes will be due if the stock is sold.
The tax treatment of the stock depends on how long it has been held. You will pay your regular income tax rate if you sell the stock and buy it again within one year.
After you have held the asset for a year, you will be subject to the long-term capital gains rate. This is often lower. You can either write it off your taxes or subtract your gains if you have an investment loss.
Although the market has done well overall, many stocks don’t perform well or may go bankrupt. These stocks eventually become worthless and may even be a loss. Some stocks, such as Amazon or Apple, have seen their stock prices soar for many years and earned investors hundreds of thousands more than their initial investment.
Investors have two great ways to win in the stock market:
- To capture the index’s long-term return, you can buy a stock fund that is based on it. Its return can fluctuate greatly, with it ranging from down 30% in one year to up 30% in another.
- You can buy individual stocks to try and find stocks that outperform the market average. This approach is riskier than buying an index fund. It requires a lot of knowledge and skill.
How to Invest in Stocks
You’re ready to invest in the stock market but not sure what to do first? After all those considerations, we are confident you are curious about how to get started.
This step-by-step guide will help you invest in the stock market correctly and ensure you are, at least, starting with the right foot:
Decide Your Investment Approach
Some investors prefer to purchase individual stocks, while others choose to be more active. There are several options, and you should consider the main ones to determine which one is going to be your approach:
- Individual stocks: If you have the time and desire for thorough research and evaluation of stocks on a regular basis, you can invest in individual stocks. A patient and smart investor can beat the market over time. If things like quarterly earnings reports or moderate mathematical calculations do not appeal to you, it’s perfectly possible to take a passive approach.
- Index funds: You can also buy individual stocks. These index funds track an index such as the S&P500. We prefer actively managed funds to the former, although there are exceptions. Index funds are typically much cheaper and almost as likely to achieve the same long-term results as their underlying indexes.
- Robo advisors: Another option that has seen a lot of popularity in recent years, the Robo-advisor. This one allows you to invest your money in an index fund portfolio that suits your risk tolerance and investment goals.
Determine How Much You Want to Invest
Let’s first discuss the money you should not invest in stocks. The stock market is not a place to invest money you may need in the next five years.
After all, this market is expected to rise in the long term, but there’s too much uncertainty in the short term. In fact, it’s not unusual for stock prices to drop 20% or more in any given year. The market plummeted by 40% during the COVID-19 pandemic in 2020 and recovered to a record in a matter of months.
Therefore, take care of your emergency funds, determine how much you need every month, how much you’re going to spend on yourself and other expenses, and save as much money as you can.
Open an Investment Account
If you don’t have the means to invest in stocks, all of the advice on investing in stocks for beginners won’t help you. You will need a special type of account called a broker account to do this.
Companies such as TD Ameritrade offer these accounts. Opening a brokerage account takes just minutes and is usually quick.
EFT transfers, checks, wire transfers, or postal money are all options to fund your brokerage account.
Opening yours is easy. However, you need to consider some things before you choose a broker.
Select Your Stocks
This is probably the hardest part, and how you approach this will depend on your research and your steps so far.
Also, we can’t cover everything in just a few paragraphs, but these are the key concepts you need to know before you start:
- Diversify your portfolio.
- Only invest in businesses that you are familiar with.
- High-volatility stocks should be avoided until you are comfortable with investing.
- Always avoid penny stocks.
- Learn the fundamental concepts and metrics for evaluating stocks.
It is a smart idea to understand diversification. This means that you should have a variety of companies in your portfolio. However, we’d caution against too much diversification.
Keep your investments in businesses that you are familiar with. If you find yourself evaluating a specific type of stock well, you can have a large portion of your portfolio from one industry.
You should be familiar with the basics of how to evaluate stocks before you invest in them.
The Local Lead Generation Process for Your Stock Investing Business
All right! So, everything is about building properties and generating leads. But how does the process actually take place? Are there other steps I need to know?
The steps I mention below are what students from our local lead generation program follow to generate leads for businesses like yourself. So I’ll help you see what we do. And how if you join our program, you can simply generate leads for your own business (unless you want to start a side hustle and build a laptop lifestyle business).
Essentially, our lead generation can be divided into four steps:
The first is prospecting. You need to take the time to do market research on a niche (industry) and determine how many phone-driven businesses are there.
Keep in mind that this is local research as you need to know how many companies need leads. For example, you may search for “plumbing services Youngstown OH.”
You will find dozens or even hundreds of businesses trying to get themselves in front of the customers by ranking on Map Listings, organic results, and even Ad.
The second step, building. When you find a niche (plumbing, tree services, a software company, real estate…), you will need to start building your digital properties. You don’t need to be an expert in HTML or coding. It can be easy with the right tools.
The third step is now taking time to rank your lead gen website. With the site done, you need to work on SEO strategies and start dominating those Google search results. If you’re new to SEO, it stands for Search Engine Optimization.
To keep it simple, it consists of the entire process of growing a company’s visibility on search engines like Google and generating organic traffic. And remember this, local lead generation is part of the strategies.
Moving on to step four, once you rank the site, you will start getting your ROI and profits. You only need to rent it out to a local business interested in the leads the site generates. You can offer a couple of free leads to their move on with the actual pay per lead.
To review steps 1-4 above, I described it to a normal student who is building a lead gen business to help local service providers generate more calls. But replace the student with you as the business owner. And replace sending the leads to a business to simply siphoning the leads to your personal business.
By the way, fun fact, about 20% of our students in our local lead gen program are actually business owners who went through the program. And they use the skillsets we teach to generate leads for their own business.
An Example of Lead Generation: Home Advisor
You must be thinking, “if lead generation sounds so good so far, how come I haven’t seen any company?” That’s the thing; there are many out there. You just don’t know they are dedicated to it.
HomeAdvisor is one of the best examples you can find on the Internet as it is a top lead generation company that has spent millions building its brand but also earned even more zeros for this same reason.
They started small as everyone else but invested in building their brand awareness to make people who are looking for home services go to their website and find what they need. They are over 75% of people’s first choice when they need those services.
If you don’t get HomeAdvisor that much or need a refresh, users need to submit their information to request a service and get a professional or expert who can provide it.
HomeAdvisor’s job is to share your information, which makes you a lead, with local companies so they can contact you and offer the service you’re requesting. For sharing this lead information, HomeAdvisor gets paid by the companies. This happens for every single lead they send to multiple businesses.
Business owners who don’t have marketing skills or don’t even know how to have any online presence will always rely on those pages to list their services. They will save time and effort, but companies like HomeAdvisor can make them spend lots of money as leads aren’t exclusive (one lead is sent to multiple companies after all).
Using Facebook Ads aka Paid Ad Platforms: Do They Generate Leads?
They DO generate leads. If not, no one would use them.
However, you need to remember two facts:
- Paid ads or platforms can be expensive.
- They don’t generate “natural” leads.
Whenever someone sees or clicks in one of those ads, over 80% of them did it by accident or are trying to close/report it.
Why? Because they aren’t looking for those services. At least not at the moment.
What those ads do instead is interrupt their time on the platforms. Users aren’t there to find companies or businesses unless they are searching for a specific company’s user, and for that, there’s a search bar. This is why it is hard to convert them to actual customers who will show interest in the companies’ services. Also, you’re limited by a budget.
When using lead generation, everything is organic. You aren’t forcing others to pay attention to your business but rather being there when they need you. This is why Google’s organic traffic will always beat paid ads, and the reason companies continue investing in it, which is a lot cheaper as well.
What Is Local SEO?
Don’t worry… I didn’t get it at first either. Following the short explanation, local SEO focuses on scaling businesses’ visibility on search engines. However, this is only for those who serve their communities face-to-face.
What does this mean?
Experts and professionals like painters, plumbers, and dentists (but not only them) offer their services to their local customers. Why? Because they can’t deliver them unless they are located in the same area of their customers.
To make sure those businesses get more leads, you need to rank them locally by claiming the business listing on Google to place them on Map Listings. Local SEO also involves online reviews, citation management, and how you manage your entire online presence in the local area.
If you are going to bet on lead gen, you need to adapt yourself to today’s world: The Internet.
Keep in mind that although traditional channels and methods like billboards, warm calls, and pamphlets still work, they aren’t part of your tools. Whenever someone needs a service, they go to Google and search for it.
“Dentist in Miami” or “plumbing services in Orlando,” etc. And you can keep coming up with services or professionals people need and look for. Thus, you need to make sure you’re using Google to get the companies in front of their clients.
Users will always click on the first search results (those near the top), and many of them will be either Ad links (people paid to place their websites there), Map Listing, and then you get websites. Almost all of them are your goal and where you should always aim to place yourself.
Can My Stock Investing Business Utilize a Local Lead Generation Strategy?
If you want customers, you better know you need it. Following the previous explanation, lead gen is all about placing businesses in front of their customers, choosing them over their competitors.
Put it simply – it’s all about closing deals and having clients for those companies to make money. The main difference with the usual methods companies use for this is how lead generation approaches different channels to get them in the right place of the market to get customers.
Those channels are all focused on the Internet as most people are searching for products but also services across the net. The issue is that the Internet is way too broad, and businesses don’t know how to place themselves. They usually try, but they get one common result: losing money and time.
How Powerful Are Organic Stock Investing Leads from Google?
For companies looking for customers, it’s everything. For you? Pretty much the same. When you build a business with digital properties, you get to make thousands of dollars a month.
This isn’t a “get started today and get rich tomorrow” thing, but it is HIGHLY scalable, and ROI + positive results are guaranteed. Learning a fairly decent and very needed set of skills to create your digital properties and start ranking them on Google is required.
I have invested in several online businesses over the years, and if there’s something uncertain, whether you will get your ROI or not, even more than the actual profit.
However, this business moved my earnings from five figures a year to a month in ONLY passive income while sitting comfortably at home.
On my laptop. Anywhere. Anytime.
You can look at one of the first sites I built back in 2016, and it continues making me over $1.000+ every month. The best part is that I don’t need to touch it or the rest I’ve built over the years, just like this digital property.
What Makes Lead Generation SO Alluring?
Here it goes: you can work from home.
The main issue with regular business opportunities is how much you need to invest in staff, equipment, or rent to have a place to sell your products or offer your services.
We all know the hassles of traditional businesses that involve regular expenses, which are extremely high. Can you afford it? I don’t think so, and even if you can, is it worth it? Now, it isn’t only about the money. You also need to put in a lot of work, and it isn’t only during the first couple of months or years. Usually, it is as long as you continue running it.
You can save yourself those headaches and bone-breaking tasks and expenses with lead gen since it is more about generating leads with digital channels—mainly websites.
Websites can be VERY cheap to build, and with many tools online, you get to do it in a couple of hours instead of days. Any virtual or digital business is scalable and won’t need constant maintenance.
So, let’s summarize this:
- You save money in regular expenses with traditional and most online businesses as what you need is yourself and digital properties (websites).
- You can bet on passive income.
- There’s no need to hire more people to get started.
- You can generate leads in multiple industries, which allows you to work on any niche you want.
How Can I Get Started in the Local Lead Generation Program?
Anyone can start and learn. That’s the beauty of this business model. I knew nothing about SEO, Map Listing, and everything I’ve mentioned so far. It is all about learning the skills, gaining experience, and deciding to take the step.
Remember that this business model will never get old as business owners are always looking for leads. They need to do business and scale their companies. Why not do the same while helping others and still making money?
You can start with this local lead generation course highly recommended for anyone wanting to grow in the business. It is a close training that will take you through each step and make sure you are able to get your ROI, profits and take control of your life.
You will be added to an incredible lead generation family ready to help you 24/7 when asking questions on the group. Anyone is welcome who’s willing to put in the work. Click here to watch the lead gen webinar.