Investing in the stock market is tricky. With all the high highs and low lows that happen when investing your hard-earned money, it can be a lot to understand in order to make money. As students with little to no experience in investing properly, this is your beginners guide to the stock market.
From understanding capital gains to knowing your investment strategy and risk tolerance, it is important to start with the basics. Certified Financial Planner, Mark Potter explains how the stock market is not that difficult to understand. “A stock market is just like any other market. You have a buyer and a seller that are getting together and coming to an agreement on what price they want to pay for a good that’s being exchanged. It just happens that the good is the common share of a company.”
When starting to access your investment strategy, there are 2 different types of investment approaches that work for different sets people. So, when thinking about how to invest, Mark Potter describes the different types of investors, “There’s a number of different strategies and it’s all suited, kind of, to the type of person you are. If you’re the type of person who can sit back and relax and ride through different markets and not worry about your money, then you’re probably better off being a value investor,” but also, “if you’re somebody that sits there and constantly needs to look at things and buy and sell and gets excited quickly then you might be a growth investor.”
In order to achieve capital gains, you have to invest your own money into becoming a shareholder of a company. But what is holding students back from investing their money? Western University student, Vanessa Bullock reveals that since she doesn’t know a lot about the stock market, it might be a while before she invests.
“I feel like it could be a smart decision if you have someone advising you and if I were going to randomly throw my money at 
some sort of company, I feel like I wouldn’t do very well…maybe down the road.”
It is important to remember that investing in stocks also comes certain tax consequences and as students, these tax implications may be too much money. So, Mark offers some advice for students to invest their money properly, but to also divert from paying high amounts in taxes
“Generally, students who come out of school won’t have a very high income to start off, so they don’t necessarily need the deduction that an RRSP would provide. So, they might be better off putting money in a tax-free savings account and that way any interest dividends or capital gains that you make on that money, in that sheltered account has zero tax consequences.”
This beginner’s guide to the stock market doesn’t end here. There is so much more to know when it comes to investing your money and averting high risk situations. If you are wanting to invest, talk to a certified financial planner to help ensure your money is being used in the right way to garner success in the stock market.
