7 Things you need to know before investing in stocks

he shares are one of the most well-known investments in the world and that generate more interest in the financial world because their influence goes from the world's big economies to the small investor. Next, we will detail the key aspects that we should all know about actions.

What is an Action?
An action is a part of the capital of the company, when you buy an action you are buying a part of that company, that is, you are now one of the owners of that company.

Share Classes:
The main classes of shares are the ordinary and preferential shares and the main difference is that preferential shares have a preferred dividend and in case the company is liquidated they have priority over ordinary shares. However, preferential shares do not have the right to vote while ordinary shares do.

How are profits obtained?
The two basic ways to earn profits are through dividends paid by the company or selling the share for a price higher than the purchase price.

How much is earned by investing in stocks?
You do not know, just as the stock you buy can be valued a lot, it can also be worth nothing and lose all your investment, so my advice is not to invest the money you need to pay rent or college semester but money extra that does not compromise your obligations.

Is it necessary to have a university degree in finance to invest in shares?
No, however, it is very important to have some training before investing, a good investor does not form in a couple of months, this requires a lot of dedication, commitment and discipline, do not trust the one who assures you that with a one month course you will to obtain very high profitability. Warren Buffet said: "Never invest in a business you can not understand"

Types of investor:
It depends on the level of risk and the term in which you want to obtain profitability, ranging from a risky investor who can buy and sell an action in a matter of minutes to a conservative investor who can hold his stock for 15 years or more. In my case and as a personal opinion I prefer to make a thorough analysis of the companies and invest in the long term, but I repeat it is my personal opinion, there are investors who can be very successful being more risky, however, we must bear in mind that the transactions They usually have a cost and each time an action is bought or sold, those costs have to be borne.

Key concepts:
IPO: Its initials in English are Initial Public Offering in Spanish is going public and it is when a company decides to sell its shares in the stock market.

OPA: Its acronym means public offer of acquisition and is when one or more companies make an offer to buy the shares of another company.

Technical Analysis: Study the behavior of the action through graphs in order to predict the behavior of the action. Although it has no scientific support, many investors and traders use this tool to complement their decisions.

Fundamental Analysis: It is a study that is done on the elements that affect the value of an action. Its objective is to determine how much an action is worth. Remember that value is different from price.

Portfolio Theory: It is a statistical model that allows to create an optimal investment portfolio, that is, where risk is minimized or profitability is maximized. Although he has several debatable assumptions this model won him the Nobel prize for economics for Harry Markowitz.

Value Investing: It is an investment methodology where a fundamental analysis is made to determine in which actions to invest. His predecessor was Benjamin Graham. Warren Buffet is one of the supporters of this methodology.

Finally,

How do I buy stocks?
You will need a broker, also many banks in your digital platform allow you to buy shares.

Remember, training is a fundamental part of the investor, without education would cease to be an investment and would be considered a bet, if you are starting in the world of finance I recommend our financial and financial Excel courses to which you can access for free, we are also launching the book: 15 lessons of Excel Financial , do not stop preparing!