How to Invest in Stocks: Value Investing

Today I’m going to talk about a strategy you can use to invest in stock. 

Now that I had learnt about what investing was (check out this post to find out more about this topic), I wanted to know how I could take my hard earned money from my bank account and magically get it where it needed to be so I could buy a stock. This required more reading to understand what an investing platform and investing accounts were.

I typed “how to invest in stocks” in Google. And guess what - there is an overwhelming amount of information and ways to do this on the internet. So I also asked my friend “how do you invest in a stock”? Can I just restate how nice it is to have someone you can ask even the simplest of questions to without the risk of being made fun of and they can answer it in simplest of terms so you can understand it. This paired nicely with the videos I found online of the “how to” step by step instructions on how to set up an investing platform, aka. investing brokerage and investment accounts.

I had been listening to “InvestED: The Rule #1 Investing Podcast” at this point and decided I needed to get more intentional about learning the investing strategy they were talking about - Rule #1 Investing.

Rule #1 Investing

This investing strategy is one of the many investing strategies you can choose from. It’s not the most common approach but it made the most sense to me because:

• I want a proven investing strategy that works 

 

• I want a systematic approach that has a simple principles to follow

 

• I do not want this to consume all my free time

Rule #1 investing is also called value investing. It means you put your money where your values are. You already do this and likely don’t even realize it. Have you ever thought about why you buy groceries from where you do? Is it because of the price, the location, the convenience, the way they source their products? This is you making a choice about groceries based on your values.

We all have values. You might not be consciously aware of them so this would be a good time to think about your values so you can be abundantly aware of them when you venture into the stock market. 

So I’ve chosen an investing strategy (Rule #1 Investing aka. value investing) now I need to learn the strategy. Like learning anything, learning to invest is a practice, it takes time to learn and you won’t become rich overnight.

I started reading the book written by the host of the “InvestED” podcast, Danielle Town, called “Invested - How Warren Buffet and Charlie Munger Taught Me to Master My Mind, My Emotions, & My Money.” She breaks down the value investing strategy into easily consumed parts. She also lays out some simple truths: 

“Investing is not about being smart; it is about knowing that what you’re buying will be worth more in ten years and being patient.”  - Danielle Town, Invested

With value investing, you need to be patient and courageous. You need to understand what you want and then know when the opportunity is right to get it. You can’t be swayed by other people's greed or fear. 

“The key to successful personal investing: learning how to use predictably irrational and emotional short-term decisions of others to my advantage” - Danielle Town, Invested

I work hard for my money so I want my money to work hard for me. I do not want to gamble with it in the stock market and risk losing it. If value investing is the investing strategy used by Warren Buffet and Charlie Munger, two of the most successful investors in North America, then this strategy is something worth learning more about (if you aren’t sure who these two are or why they matter, look them up).

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