Investing Vehicles, Price Movements & How to Get Started

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Now that we understand the basics of investing, let's look at what to invest in and how to do it.

Note: many investments are inaccessible to most people. For example, if you want to invest in a hot new tech startup... you probably can't, unless you're an accredited investor and have all the right connections in Silicon Valley. In this class, we will focus our attention on investment vehicles that are broadly accessible to almost anyone, anywhere in the world.

Investment Vehicles

The generally most accessible investment vehicles are the following:

  • Stocks/equities/shares (different names for the same thing)
  • ETFs (exchange traded funds), index funds
  • Commodities, forex, options, futures...
  • Bonds, savings accounts
  • Real estate
  • Crypto

Investments I Don't Recommend

Out of these, here are the ones I don't recommend:

  • Commodities, forex, futures, options: these I don't recommend because of the difficulty level. You can make money here, but it's a very tough game.
  • Bonds, savings accounts: not recommended because the returns are so low that they basically aren't worth it.
  • 99% of crypto projects/coins: crypto is an amazing opportunity, but the vast majority of projects are trash and won't be around even a few years from now.
  • Penny stocks: same reason as above - penny stocks theoretically have more potential upside than stocks of larger, more established companies, but it's not worth the added risk.

Brokerage Apps/Accounts

A brokerage account is what gives you easy access to investing in stocks, ETFs, and index funds. Here's what I recommend:

Step 1: Choose the Right Broker

There are many brokers to choose from - and the available options are different in each country. So instead of making a specific recommendation, here's what I'd look out for:

What to AVOID

  • Zero fees — if they don't charge you, you aren't the customer. Instead, value is being extracted from you and passed on to the real customer.
  • Overly engagement optimized apps full of effects, gamification and notifications.
  • Find out if your shares are being lent out. And if they are, only use the broker if share lending is optional and you can turn it off.
  • Crypto that you don't actually own — many neo brokers and neo banks advertise that you can purchase crypocurrencies with them, but they won't let you withdraw crypto to your own wallet. When this is the case, you don't actually own crypto.
  • Constant "server issues" and turning off the "buy" button when large price movements occur.
  • Ask about PFOF (payment for order flow) - if a broker participates in this, don't use them.

In case you're wondering: yes, I'm calling out Robinhood with those last few points. Robinhood is the original "disruptive" broker app and they have quickly racked up a long list of offenses against their users. Avoid them - and the many copycat offers that have appeared - like the plague.

What to Look For

  • Low fees — ideally, your broker offers low, but non-zero fees.
  • Access to international stocks & ETFs (check pricing and fee levels for domestic and international stocks).
  • A reasonably user friendly experience that makes it easy for your to see your portfolio, buy and sell and that doesn't have restrictive limits on what you can do.
  • Look for a trusted, established provider that's been around for a while and has many users. For brokerage accounts, I prefer old companies that have kept their offering up to date over the new, social media influenced, "disruptive" apps.

Step 2: Signup for a Free Tradingview Account

Tradingview is an excellent one-stop-shop for all the charts you could ever want. It lets you check the price development of pretty much any tradable asset.

And you you use it completely for free: sign up for an account here (scroll down to pick the "try free basic" option)

I recommend that you have a play with this and explore some of the historic price movements of different assets you're interested in.

Step 3: Dip Your Toes In

Once you've signed up & gone through verification with a broker, you can now buy and sell stocks...

...and you'll probably lose money!

In the next lesson, we look at why that is and how to avoid that. It's good to be cautious when it comes to investing. But you can also be too cautious.

When you're new to this, it can all seem foreign and complicated and that can keep you out. I recommend that you get familiar with this world by putting a small amount (some amount you don't mind losing completely) and making a purchase. But some stock of a company you like and see what happens!

Allow yourself to become an active participant in this world and do it playfully, with a very small sum. The best way to learn is as an active participant. As you learn more and you get used to it, you'll be able to make decisions about how, where and how much more money you want to add.

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