When to start investing in stocks
Stock Market For Beginners 2021 | How To Invest (Step by Step)
hey everyone welcome back to the channel
so in this tutorial I am going to show
you how to invest in the stock market so
what we're gonna do here we're gonna
break this down into a number of parts
here within this video so you can skip
around if you would like to but we're
gonna try to make this as in-depth as
possible a full all-inclusive tutorial
showing you how to invest into the stock
market obviously right now we're in some
turbulent times in the markets and so
people are interested in investing so
what I'm going to do here is I'm gonna
break this down into a couple of
different sections first of all we're
gonna talk about a lot of common
questions that people have of how to
actually start investing what brokerage
firms should you use how much money
should you start with what are some of
the initial techniques that you can use
to find stocks or what type of investors
should you be then later in the video
retching and talk about stock market
research we're going to talk about
qualitative versus quantitative research
we're going to talk about looking at
different income statements balance
sheets cash flow statements we're gonna
really try to go as in-depth as possible
so we try to make as many personal
finance videos as possible on this
channel so if you want to watch more
videos like this the only thing that we
ask is that you subscribe to the channel
and drop a like if you find value in
this video so without any further ado
let's get started here but I first want
to kind of run over a couple things that
we are going to discuss here first of
all we're talking about the different
types of investing alright there's
different types of investors you can do
investments that are rather short-term
versus investing that is rather
long-term then we're going to talk about
how to actually buy stocks brokerage
firms that you can use ones that I would
probably avoid some some things you want
to avoid in that area then we're talk
about passive versus active investing
what type of investor would you like to
be there's some people who have a lot of
time on their hands and they want to
really learn the ins and outs of the
markets and the financial markets
whereas some other people just want to
do it passively they want to take some
of the money from their job from their
work maybe put it into the 401k but they
want to make sure that they're doing it
correctly then we're gonna talk about
stocks versus mutual funds versus bonds
versus ETFs and index funds you probably
hear a lot of this jargon being thrown
around we're gonna kind of dissect that
to hopefully get a better understanding
of it and then we're going to talk about
how much money should you start with
should you go all-in should you put as
much money as you possibly can into the
markets now we're gonna talk about
diversification a little bit well
to touch on an idea of something known
as dollar cost averaging as well
something that some people like to do
then in the latter half of the video
what we are going to discuss is
quantitative versus qualitative
strategies for understanding stocks
looking at them from both sides there
we're also going to talk about where to
gather your information from Form 10-k
10-q s talking about websites that we
can use to find a good amount of
information and then as I said we're
going to look at some of the financial
statements as well to actually start to
understand how to value a stock how do
we value a stock and decide whether it's
a good deal or a bad deal now one of the
biggest ideas of investing is that we
try to preach here on this channel is to
try to limit as much risk as possible
while increasing the potential reward
that is the goal of investing sometimes
people get a little bit confused about
that and I want to just give a little
bit of a forewarning here before we
actually start talking about some big
things here and that is to curb your ego
now I don't want that to come off in the
wrong way but the one thing that I would
like to bring across here is to make
sure that when you are investing
especially if you were just beginning
investing make sure that you are making
investments based off of actual logic
rather than emotional investments I know
when I first started in the markets I
would start to buy stocks on a whim I
would see somebody on the news I would
see Jim Kramer talking about buy this
stock now and I've just go out and I'd
buy it right away within five minutes
not really knowing anything about the
company so what I suggest that you do is
try to find a buddy or a friend who
might also be learning about investing
or maybe they've already been investing
for a long period of time call them up
talk to them and kind of use sort of
this buddy system so that before you
make any investment you call up one of
your friends or associates and tell them
about this investment that you're
thinking about making run it over with
them see what they have to say about it
some of their concerns about it and it
really kind of creates this better
better way to invest so that you can
throw ideas and bounce ideas off of each
other and so that's just something that
I would suggest doing so let's actually
start by talking about the different
types of investments so there's
different strategies for investing maybe
you've heard of some of these known as
technical analysis and then there's
others such as fundamental analysis and
then there are other strategies as well
something
that people like to do which is sort of
passive index investing where they dump
money in through dollar cost averaging
those are really the three primary
strategies for investing and then
there's also another one that we'll
touch on briefly which is more so
behavioral finance going off of the news
going off of trying to understand
people's emotions and making investments
from that perspective now on this
channel and what I do and what the
majority of investors on Wall Street and
throughout America throughout the world
do is they use some type of fundamental
analysis and this is through long-term
investing where you are trying to find
companies that their current valuation
the current stock price is lower than
what it should be at the moment and so
there's a number of ways to do this but
first let's actually just discuss a
couple of others before that and one of
those is technical analysis and this is
actually something that you probably
will hear when you look at somebody who
maybe is a day trader or swing traders
or very quick traders people who get
into a stock and get out of the stock
and based off of technicals based off of
the actual stock charts so the truth is
most investors myself included I don't
actually sit in front of like three big
monitors and looking at stock charts all
day long and watching as every couple of
minutes those stock charts change and we
see the price go up and down and up and
down really what I'm focused on is long
term investing and as I said most people
on Wall Street focus on long term
investments as well so we're not so much
worried about the day-to-day activity
but more so over the span of months and
over the span of years where that
company is going to be now you can
certainly get into day trading you can
certainly get into penny stocks and
swing trading it can be very attractive
I know people who make quite a bit of
money in those and actually I would
suggest picking up some books simply
like this technical analysis for dummies
I actually love these for dummies books
but this video is not really about
technical analysis we're focusing on
long-term investments that can really
build wealth and I should also mention
that I'm not actually a financial
advisor I'm just a ran a person on the
internet so make sure that with all of
this information that you are learning
here in this video make sure that you go
on your own and start to really kind of
learn more for yourself because like I
said I am just a random person I have
been investing for some time but I just
wanted to make that very
clear okay so let's talk about how you
can actually buy stocks people have
wondered this for some time they say
there's so many different companies out
there and I see these advertisements for
it how do I actually buy a stock well
touch on this very briefly because I
think some people already kind of know
how to do this or to be honest you could
just go onto the App Store and type in
investing app and you can find one on
there but there's a couple that I really
like but there's also a lot that you
probably have already heard of before
like TD Ameritrade Charles Schwab
fidelity Vanguard those are the more
traditional ones and then we see a lot
of newer ones in the past few years like
the Robin Hood app m1 finance which is
one of my favorites I just like working
with them and then there's others as
well like Weibo and I've seen a number
of others popping up as well I saw
something like public popping up so
there's a lot of different apps that are
available I'll leave some links to some
of those down below if you're interested
in signing up I think it might be an
affiliate link so I might get some money
if you sign up for it but you totally
don't have to do that you can just go
and google it if you would like to to
find some different brokerage firms but
to be honest it doesn't really matter
which brokerage firm you go with a lot
of them today are pretty similar to each
other they have very similar features to
them as I said though I really do like
m1 Finance because you can do fractional
shares investing whereas for example if
you wanted to invest into Amazon stock
and looking at Amazon stock here it's
almost two thousand dollars per share so
traditionally if you wanted to buy one
share of Amazon stock you would need to
actually have almost two thousand
dollars to buy that you wouldn't be able
buy half of a piece of one Amazon share
right well now you can do that with
something like m1 finance this is this
is not a big advertisement for them it's
just something that I actually do like
about them but also there's a very low
amount of money required to actually
start investing you can start accounts
with $100 or less for most of these
different brokerage firms now let's
actually talk about stocks and what a
stock specifically is just briefly
because I I know for some people that's
been kind of a concern of what actually
is a stock how how does it function the
most basic way to put this in a couple
of sentences here is that a stock is
essentially just a piece of a company
that you own so when I bought my very
first stock my very first share of a
company 2009 it was Cedar Fair and I
paid I think it was 12 dollars for one
share of Cedar Fair stock it was it was
not a very good move but I bought one
share for $12 and what this means is
that let me pull up Cedar Fair stock
right here and just show you exactly
what this actually would mean so if you
buy one share currently the price of
Cedar Fair is $18 and 34 cents per share
so if you buy one share that means that
you own a tiny sliver of this company
you actually own a piece of this company
it's not that you're speculating on it
you actually own a piece and so what can
happen here and depending on the type of
company you can actually get invited to
shareholder meetings I know that I used
to get invited to Cedar Fair shareholder
meetings it would actually give me free
tickets to their amusement park even
though I only had a few shares it's
actually a pretty good deal but you can
actually get invited to the shareholder
meetings especially if you own a lot of
shares of a company for example if you
own one share you're not gonna really
have much say in a company but some
people who own 10 20 30 % of a company
can actually vote on certain things that
the company does they can vote on who's
going to be on the board so it's really
really interesting how this can work but
yes you own a piece of the company
unlike bonds or bonds you're going to be
essentially loaning money to companies
and then they're gonna give you that
money back with a little bit of money on
top as an interest rate well with stocks
you actually have some equity in that
company and that's the best way to view
it hopefully that kind of clears it up
if you're still a little confused you'll
probably just learn more throughout this
video as we sort of explain how these
stocks function but that is the basic
understanding of it so let's actually go
back to where we were here we talked
about how to actually buy stocks open up
a brokerage account like I said and when
Finance is one of my favorites it's
super easy once you sign up you can sign
up for an individual brokerage account
or you're probably gonna see a ton of
different options when you're signing up
where you might see you're gonna have an
IRA potentially you're gonna join
accounts custodial accounts if you're
under the age of 18 in America then it's
going to be difficult to invest in the
stock market you can still do it you're
just going to need to get your parents
help with that it's technically going to
be a called a custodial account so it's
under their name but your name is
attached to it as well and so I'm not
sure on the entire legality of whether
or not you legally if you're under 18
are allowed to control that money but it
has your name on it and I know
when I was younger and this is not
advice here but when I was under 18 I
had access to my account and I was
investing with that and and I just had
one of my parents on that account so I
could get started with that so like I
said if you're under 18 you can still
totally do this you just need a little
bit of help from some type of adult
joint accounts there's going to be Iowa
accounts to give me a number of
different ones the basic one the most
simple one is just going to be an
individual brokerage account it's
probably one you can see at the top of
the list when you were signing up for
opening up a brokerage account okay so
let's talk about passive versus active
investing here which one is going to be
the best option obviously this depends
on you as a person and how much time you
have on your hands so I'll tell you this
that for the first few years of my
investing journey I actually spent a lot
of time looking into individual
companies investing into individual
stocks because I had a lot of time to
not only read a lot of books which is
something that I suggest people ask
what's the best way to learn how to
invest two ways one reading books read a
ton of books read at least a dozen 2,000
books they're gonna learn so much but
also the other way to learn is through
experience it's through making mistakes
and then learning from those mistakes
but as I was saying there's two ways to
really go through investing here into
the stock market you can be a passive
investor or an active investor active
investors from the way that we do this
from our approach is to I would say
roughly about at least once a week at a
minimum you're looking over each one of
the stocks that you own you're looking
at the news from those companies making
sure that everything is going smoothly
if there's any red flags were able to
recognize those red flags at least on a
weekly basis so you're still putting in
some hours for that I would argue that
people might put in anywhere from five
to ten to maybe 15 hours per week of
actually reading about companies
learning about companies and making sure
that the investments that they have or
future investments that they're looking
into are in good condition now if you
don't have that time on your hands
because I know a lot of people are
struggling to find time in their day
well if you don't have time on your
hands for that you could take an active
or a passive approach to investing as
well now one approach is not necessarily
better than the others but from a
passive approach a lot of people do
something called
dollar cost averaging and they do this
into mutual funds and ETFs maybe hear
people talking about investing into
index funds through dollar cost
averaging this is a strategy that many
people use as well it's certainly been
tested especially now in we're in April
now of 2020 so it's certainly been
tested with the markets seeing pretty
volatile times but this is an approach
as well and we will talk about that
passive investing strategy what we're
really focusing on more so today is a
little bit more active investing talking
about investing into individual
companies and finding good deals within
the markets so let's talk about
short-term versus long-term investing as
well something that we need to very much
clear up what type of investors should
you be in terms of how long you're
investing and so one thing that I want
to make very clear is that the way that
we invest in the way that most people
who have succeeded very much on Wall
Street or in the stock market invest for
a long period of time what we mean by
this is that if you are buying a stock
and then hoping to sell it in a few days
based off of fundamental analysis that's
not really what we focus on what we want
to do is we want to buy a stock that can
reap rewards for a very long period of
time for decades to come
so the way that I do this is I'm very
much oriented about if I'm buying a
company now if I'm buying a stock now I
want to make sure that this company is a
very good company in five years and so
that is one thing that we do want to
take into consideration of what type of
investor you're going to be and if you
want to make money fast or if you're
looking for just to get rich quick this
might not be the video for you but if
you are still looking for maybe a little
bit more thrill as I said I would
consider looking into some things like
technical analysis or day trading
although they can have certainly a lot
of risks to it now let's talk about
stocks versus funds stocks versus mutual
funds ETFs so as we mentioned earlier in
this video a stock or a share of a
company you're going to own a piece of
one company but with ETFs exchange
traded funds or mutual funds or maybe
you hear index funds as well what these
are are going to be essentially a basket
of stocks that people can invest into so
say that you didn't want to put all of
your money into Walmart stock because
you want to diversify
you don't want
all of your money going into one company
because what if Walmart has problems
next year and their stock price goes
down to much lower than what it was
today and you can end up losing a lot of
money and so what some people like to do
is they like to invest into ETFs mutual
funds index funds they're all relatively
the same for the purposes of this video
we're just going to say that ETFs and
mutual funds they're relatively the same
in the sense that they're going to
represent an overall basket of stocks so
think about something like mu vo o is an
index fund which is run by Vanguard
okay so Vanguard is a financial
institution you can open up an account
with them I think they're a really good
company so it is essentially just a
brokerage firm that you can use here but
something like movie oo which is an S&P
500 index it tries to track the S&P 500
so maybe you've actually heard about
people talking about the stock market is
down 600 points today or the Dow crashed
7% today well these are actually indexes
that essentially kind of show us how the
markets are doing overall so for example
the Dow Jones Industrial Average
represents 30 companies in the United
States then we have something like the
S&P 500 which represents 500 companies
in the United States this is probably
arguably the best indicator for how well
the US markets are doing the stock
market in the United States and overall
kind of the economy as well and then
there's another index that we see quite
often in America which is known as the
Nasdaq which is much more focused on
tech stocks but then throughout the
world as well
most countries or most regions in the
world are going to have some type of
index that you can see how well that's
doing so in Shanghai there's an index in
Tokyo there's an index in your up
there's some index funds and so each one
of these is going to be an overall
basket of stocks sometimes maybe 30 or
40 stocks and other times it can be a
thousand stocks I know that I have some
investments in two mutual funds or ETFs
that have over a thousand stocks in that
one so let's say that one share of an
ETF
is $100 well inside of that $100 let's
say that that ETF owns 100 companies
that means that I theoretically could
have invested $1 into each one of those
100 companies when I bought one share of
that ETF
hopefully that's making sense to you so
it just sort of diversifies your
investments and the pros to this is that
well let's say that you investment into
an ETF like vu vo o which is that SP 500
index fund it represents 500 companies
so if you invested money into this well
you're pretty well diversified and so
what this means is that let's say one
out of these 500 companies goes bankrupt
let's say they pull an Enron or Alima
brothers or a Bear Sterns and they go
bankrupt they have no money left and
they go under and their stock price goes
to zero well if you buy an index fund if
you have money into an index fund well
if that one company had 500 went
bankrupt the other 499 should hopefully
kind of carry the weight for that and
you wouldn't really feel that much of an
effect from that but on the flip side if
you say one of those 500 companies turns
into the next Amazon the next Apple the
next Netflix and it absolutely booms and
the stock price goes from $1 to $1,000
well you're not gonna see much of an
effect from that as well because the
other 499 stocks might be sort of
weighing it down so you can see kind of
how that has both positives and
negatives to it with index funds and
ETFs and mutual funds so hopefully we
can clear that up for you what we
actually talk about in the rest of this
video is actually focusing more so on
individual stocks because I know a lot
of people want to invest into just a
couple of companies maybe they want to
invest into 10 20 30 companies and they
want to choose them themselves rather
than just kind of blindly putting money
into index funds or ETFs and mutual
funds okay so let's actually talk about
stock research here first of all let's
discuss quantitative versus qualitative
research now I suggest to take out a pen
take out a piece of paper I hope you
already did this but there's two really
strategies for looking at companies one
of them is qualitative research so this
is something along the lines of looking
at a company's culture looking at the
the model of the company looking at
their vision and even the leadership of
a company for example this is very
important because if you are just
looking at the financials and the
fundamentals and you're looking at the
numbers but you're not looking at who's
the CEO is the CEO Pappajohn because
that might be a problem so
you want to make sure that you are
looking at a number of things throughout
the culture of a company making sure
that there's no issues within that some
potential problems I'll give you an
example here looking at Facebook like
Facebook a lot of people are a little
bit wary about Facebook because of some
of the things that they've done in the
past
we saw the cam bridge analytical scandal
so qualitative research is very
important but I would argue that most
people probably spend about 20% of their
effort on qualitative research and then
80% of their effort on quantitative
which i think is a reasonable amount to
go for so most of the time that I spend
when I look at investments is actually
focused on the financial numbers rather
than that qualitative things like
looking at Facebook and Mark Zuckerberg
and looking at they're prone to maybe
more scandals in the future those are
all things that you do want to take into
consideration but quantitative the
quantitative approach is much more
focused on looking at the actual hard
facts and the numbers from this now what
do you actually get information from
when you invest into a stock there's a
couple ways you can do this one of them
is through just the brokerage firm that
you have so if you're using Vanguard or
using fidelity a lot of these companies
a lot of these brokerage firms that you
can sign up for actually have their own
research platforms within that so if you
want to buy some stocks or look at their
earning reports then you can do most of
that through one of your brokerage firms
that you have through your account it
should be pretty straight forward from
that but what I think is one of the best
ways in terms of gathering information
to learn about a company let's say that
you're really interested in investing
into Walmart stock you think about
investing into it you're not quite sure
so you want to learn more about it you
want to learn okay well how does this
company's financial statements look and
so one thing that you can do is to go to
that company's Investor Relations report
so a lot of this is going to be on their
Investor Relations page the best way to
find this is just through a simple
Google search or most companies if you
go to their website and you scroll all
the way down let's see if Walmart has
one on their home page if you scroll all
the way down to the bottom you'll be
able to actually just find their
Investor Relations page so let me scroll
down to the bottom of Walmart and see if
they have it on here and it looks like
they don't have it on here but you can
certainly
find it if you start to click around but
as I said I would suggest doing a quick
google search and then you can find it
see so we just click on investors here
and this will take us to their investor
relations page which at this point
you're gonna see a couple of things on
most companies websites especially if
they are on the major stock exchanges
around the world they're going to be
regulated and sent in the terms of what
types of information they have to
actually release to the public so it's
really cool about this is that if you're
investing in two stocks that are on the
major stock exchanges then you're going
to actually have a lot of information
available to you so one thing that we
see is something called a Form 10-k this
is going to be their annual report
looking at the past year talking about
the numbers from the past year and then
talking about their projections for the
future so for example what they believe
is going to happen throughout 2020 they
laid that out usually we're gonna see
this happen right around the turn of the
calendar year although it might depend
for some companies so what I would
suggest doing is downloading what we
call the Form 10-k this is probably
going to be roughly about a hundred
pages most companies it might be over a
hundred pages for that company's 10k
within here I want you to be a little
bit careful because just a little bit of
a warning that this is written by the
company so they're obviously going to
try to spin it in a very good light they
want people to invest into their company
this is their annual report that goes
out to their investors and so they're
gonna try to spin it in a very good
light so just make sure that you're
doing your due diligence there and doing
thorough research for all of that now
there's also going to be things called
210 Q's which is going to be essentially
just sort of an update every quarter of
what they're thinking about for the next
quarter based off of looking back on
their 10k so if we're in quarter three
they might reference that say our
projections were a little bit low I
think we're gonna outshoot that for the
next quarter or the past quarter we did
better so the ten Q's in the 10k is some
of the best places to get information
about a company you're gonna learn a lot
just from those trust me if you read a
hundred pages of a Form 10-k from
something like Walmart you're gonna
learn a lot about that company alright
now I'm gonna give you a little bit of
homework things that I want you to
really research more after this video
because for the sake of this we can't
crazy in-depth on every single topic
here because this is something that does
take many years to really master these
topics but what I want you to do is
start to learn about different ratios
and financial metrics that we can use to
essentially value a company or see if
this company is volatile if it is a
company that is likely undervalued or
overvalued there's going to be some
different indicators and ratios that we
can use one of them known as the price
to earnings ratio this is the p/e ratio
there's something called earnings per
share we can look at return on equity
return on assets and then there's also
other ones as well if we go to something
like Yahoo Finance here you're gonna see
a lot of things that maybe if you've
never done this before it might look
like hieroglyphics you're not quite sure
about it so we'll just kind of run
through some of these here so market cap
is the total overall valuation of a
company so if the market cap of a
company is a trillion dollars which is
only a couple of companies who have hit
that mark that is going to be well first
of all quite large but that is the
overall valuation of the company so we
take the number of shares multiplied by
the stock price and that is going to
give us the market cap for a company
look at some other ones here something
like beta this is going to essentially
sort of indicate whether this company is
a volatile stock or if it's not very
volatile so the beta of 1 is going to be
average and then if you see a beta below
1 that's going to mean that it's less
volatile than most other stocks so
looking at Walmart here the beta here on
Yahoo Finance as of today it says that
is 0.4 3
this means that Walmart stock is less
volatile and volatile means that it's
less likely to have massive jumps up or
massive jumps down so if the market for
example comes crashing down
Walmart stock is probably less likely to
come crashing down as hard but also if
the market starts to really boom Walmart
stock might be less likely to really see
some massive growth as well so it's more
stable versus if the beta here for
Walmart or for a company was 2 3 4 if it
was a lot higher then that could
indicate that this stock is probably
jumping around a lot more a higher beta
is not necessarily a bad thing it just
means that there's going to be more
volatility in it and then there's other
things as well looking at the earnings
date that is
generally we're gonna see companies
release earnings reports every quarter
so four times per year they're going to
get on conference calls and probably the
CEO and a number of other people are
going to discuss the earnings from the
past quarter from quarter one from
quarter two from quarter three and
they're going to talk about this what's
great about this is that you can
actually listen in to a lot of these
earnings reports and a lot of these
earnings calls to see how a company is
doing and if they over report earnings
or if they under report earnings that's
going to have a big effect on stocks so
this is something that you do want to
very much be aware of that if you're
looking at a stock there's going to be
you're probably gonna see sometimes
within the markets where the stock jumps
a lot or if it comes down a lot maybe a
couple times per year or about three or
four times per year a lot of that is
based off of the earnings because when
companies get on these calls sometimes
they say our earnings are much better
than what we thought we were going to do
we pulled in a lot more money last
quarter suddenly the stock in a lot of
cases goes up because people get more
excited and more bullish on a company
let's quickly talk about bullish versus
bearish just to clear those up here
bullish if you're bullish on the stock
market or if we are in a bull run it
means that is going up you believe that
is going up versus bearish on a market
or in a bear market and that is going to
be when the markets are going down
they're in a slump right so that is
something just some terminology there
that we can kind of clear up but looking
at some other ones here as well the
52-week range a lot of that is kind of
self-explanatory
looking at the stock price that's self
explanatory volume is just how much that
stock is being traded so if we see a big
uptick in volume that could also spur
some more volatility as well but that is
something that we want to look at and
then another one is is dividend okay so
thinking about a dividend of a stock the
best way to explain this in very simple
terms is that some companies in with
with the money that they're making they
choose to give some of that money back
to the shareholders rather than reinvest
it into their own business back into the
company they'll choose sometimes to
actually pay out dividends to their
shareholders so for example here with
Walmart you're going to see a dividend
of $2 in 16 cents so what this means
here is that Walmart's dividend of $2
and 16
sense they might be splitting this up
over four different quarters so you
might expect to get 1/4 or 25% of $2 and
16 cents every three months from Walmart
and you can actually just get this in
cash as a cent as a check
although most likely most companies are
just going to deposit it into your
account and it's essentially it's sort
of like a thank-you from a company for
investing into that company now that's
that's probably a terrible way to put it
but it is just a piece a small amount of
money that they are giving back to their
shareholders for owning that stock so
instead of reinvesting it they're just
giving back to their shareholders some
stocks you're gonna see how pivot ends
that are very high for example you might
see a stock that has a dividend of 10%
annually actually a lot of real estate
ones that I see have dividends of 10%
and so if a stock is $100 and the
dividend is roughly about 10% you might
expect to get $10 extra in cash by the
end of the year split up throughout four
quarters sometimes they pay monthly
dividends by the end of the year that
that company is going to be paying you I
just want to give you a little bit of
forewarning on this be very careful with
dividends I sort of just sort of view
them as a cherry on top I don't really
invest for dividends for the purpose of
dividends the one thing that I want you
to be careful with is one mistake that I
made when I first started investing
where I would look at stocks I was
looking at companies and I would say
this one company has a 15 percent
dividend or 20 percent dividend and I
would invest into it based off of that
not realizing that some of these
companies dividends were not sustainable
amounts of money that that they were
paying out and so I would end up losing
money because I was investing into
stocks that had 20% dividend but they
couldn't sustain that dividend they
couldn't pay out 20 percent per year
because they weren't making that much
money and so they ended up going
bankrupt some of those companies and it
was a terrible fiasco so just be very
careful with that view it as a cherry on
top not really a primary reason for
investing a lot of companies that are
what we're gonna say are well
established blue chip stocks companies
that have been around for a long time
like to pay dividends so a lot of these
older companies like like Ford General
Motors Walmart here a lot of these less
volatile kind of well-established
companies a lot of the ones and
the Dow Jones for example pay out
dividends as well those are some of the
things that we wanted to run over here
we're actually on Yahoo Finance and we
might as well just stay on Yahoo Finance
to show you some of these other things
that we can look at here so if we
actually click on financials and this is
where we can find a couple of different
financial statements from a company so
there's three big primary financial
statements that we're gonna look at here
today in this video and that is going to
be the balance sheet then we're gonna
look at the income statement and the
statement of cash flows what I would
suggest doing is if you really want to
learn about this I would really suggest
taking an entry level accounting class
or reading a couple of books about
accounting to really understand this
process if you've taken an accounting
class in college or even in high school
I don't know if high schools all for
them mine certainly didn't but if you've
taken an accounting class you're gonna
find this to be much easier to
understand for others it might be a
little bit more difficult but this is
still going to be very very helpful so
just looking at this here this is the
income statement for Walmart we can see
a lot of things on here that are very
relevant like the revenue we could look
at the past few years for revenue see
whether it's been increasing or
decreasing this is one that's obviously
very important to take into
consideration then we can also look at
some very other important things as well
like net income how is the income of a
company is it increasing or decreasing
what's the overall trend sometimes
you're gonna see companies that are
reporting lower and lower income but
they're still doing better as a company
sometimes we see companies like Amazon
for example at some times where their
income their net income is lower but
it's because they're putting money
they're funneling money back into
certain areas so really what I focus on
most is the revenue of a company but you
want to look at their costs and where
their costs are coming from so if you
see a massive uptick in the cost of a
company's employees and and and they're
paying their employees a lot more and
suddenly they have a big extra cost for
different legal disputes that they're
dealing with these are all things that
you are going to want to really delve
into to make sure that you're
understanding the financial statements
from these companies so yes this is the
income statement here that we can click
over to the balance sheet this is going
to be very simply it's going to be
assets vs. liabilities
so we can see the number of assets that
these companies have on their book here
once again I would suggest just learning
a little bit of about about accounting
to really kind of learn more about this
we do have some other videos on this so
if you want to kind of delve into a
little bit more you certainly can but we
look at their total assets we look at
the property that they own the stores
that they have and then we look at their
liabilities what type of debt do they
have who do they owe money to how much
money do they owe this is all where
you're gonna find this in this balance
sheet here obviously the total assets is
going to balance with the total
liabilities and the total stockholder or
shareholder equity so that's going to be
the balance sheet and then quickly let's
hop over to the cash flow statement
which is where you're going to see a
number of things in terms of the actual
money coming into a company so I suggest
taking a deep look at each one of these
I think there's going to be some great
videos that we'll put out in the coming
weeks on actually really trying to dig
deeper into these but once again some of
the best ways to do this is through
reading books now I have a number of
books here
I think these financial books about four
for dummies are some of my favorites
this one about investing it's an all in
one book there's some great ones about
the stock market I don't know why people
laugh about these for dummies books I
think they're actually really great to
learn so much about investing so I will
suggest picking up some of these I
really do think that they're just so
helpful but this one here the
intelligent investor is probably
arguably the greatest investing book of
all time a lot of people really praise
this book a lot I've read it a number of
times and I've gotten so much value out
of it that I would suggest reading this
especially if you're interested in
building wealth over a long period of
time now there's a couple things that we
do need to mention here one of them
being that it's okay if you lose some
money at first but it's important to
start with a sort of small amount of
money now this is something that I like
to advise people on once again I'm not a
financial advisor but I would suggest
starting with a small amount of money in
the stock market and then building it up
over a long period of time because as I
said some of the best place to learn is
through reading books but the other best
way to learn is through your mistakes
people make mistakes and it's very rare
to see somebody jump into the stock
market
start to absolutely crush it and not
make any mistakes people slip up at some
point they have a lack in judgment they
don't see this one thing within a
company that they should have realized
and suddenly they end up losing a lot of
money so the biggest tip that I can have
for you is start with a small amount of
money something that you can't afford to
lose so if you are living paycheck to
paycheck and you have no money
whatsoever then maybe just start with
fifty dollars or a hundred dollars in
the stock market and then over time over
the months over the years you can start
to put more money in it we get your feet
wet and then start to jump in and bigger
and bigger later on down the road once
you start to really learn as much as
possible so yes what I would suggest
doing start today if you'd like to start
today start investing into some stocks
today but start with a very small amount
of money I'll leave some links to those
brokerage firms down below and I think
what I'm gonna do is I'm actually gonna
create a group I don't know if it's give
me a Facebook group or maybe a discord
I'm gonna leave a link for that down
below maybe we'll do a discord for
people who aren't interested in
investing into the stock market so that
we can all talk about stocks together in
some type of group chat I never really
did this before and but I think it would
really help a lot of people out and once
again make sure you subscribe to the
channel if you found any value in this I
would HIGHLY appreciate if you follow me
on Instagram feel free to send some
questions over there I try my best to
respond to those questions but I can get
kind of difficult if I get a number of
people asking big kind of in-depth
questions they can get pretty difficult
so I hope you can understand that but
thank you for watching I hope you really
found some value in this video I love
creating these videos it really just
makes me happy when I see people
starting to invest into the market so
thank you for watching
investor your own risk remember that you
and only you are responsible for the
investment decisions that you make thank
you everybody have a wonderful day and
I'll see you in next week's video
![Stock Market For Beginners 2020 [How To Invest]](https://img.youtube.com/vi/Mxu85SCT9lQ/mqdefault.jpg)
