Name: I studied stocks for 1 month. Here is how I invested in 100 stocks.
Uploaded: 2024-10-08T04:16:34.000Z
Duration: 11 min 57 s
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I spent two months studying money and now I understand stocks.

I invested in more than a hundred stocks and in ten minutes I want to tell you what is a good stock and what is a bad stock.

I am on a six-month challenge to study money, how to invest it and grow it.

I am doing this with my friend Yoni, who is the founder of eToro, the largest social investing platform in the world.

If you want to join us, just go to nas.io slash money.

Everything I'm learning is available to you there for free.

There are so many ways to invest and make money.

Real estate, commodities, bonds, crypto, forex.

But today, I just want to focus on my favorite, stocks.

Buying one stock means owning part of a company.

So if you want to generate returns with real gains, you invest in the stock market.

Everything I mention here is just an example.

There are tens of thousands of stocks to pick from.

Personally, I only buy stocks that are listed in the United States.

Because I believe the world's best companies are listed or created in the United States.

Now, there are two types of stocks that you can buy in the US.

And two, stocks that are slow and steady.

Personally, 50% of my money is in risky stocks and 50% is in steady stocks. 50-50.

Asset allocation is how do you distribute your portfolio across different categories, risks, geographies.

The more knowledge you have, you can basically take more risk.

Now, when it comes to risky stocks, before I buy a stock, I have three simple rules.

One, I invest in companies that I personally love and use.

Like Uber for transportation that I use every day.

Or Beyond Meat for vegan food that I eat regularly.

Two, I invest in companies that have founders who are still in charge.

Founders build better companies, in my opinion.

Three, I invest in companies that I think can grow a lot more in the future.

Sometimes I get it right and I make a lot of profit.

Other times I get it wrong and I lose a lot of money.

This is why it's called fast and risky stocks.

I invested in a stock and I lost 100% of my money.

The second type of stock I invest in is called slow and steady.

I look for stocks that I believe can be around for 10 years or more.

Warren Buffett famously said, if you aren't willing to own a stock for 10 years, don't think about owning it for 10 minutes.

So I look for stocks that grow consistently over many years or even decades.

So the largest stocks in a stock market are usually, not always, usually the safest stocks because you know they'll be there in 10 years or 20 years.

Think healthcare stocks, energy stocks, telecom stocks, food stocks.

Companies like General Electric, Apple or Google have been around for decades and probably decades more.

There are two numbers that are important for steady stocks.

And I'm going to explain both numbers so you can look out for them in the markets.

It's the price people are willing to pay for every dollar that the company makes in profit.

If a company makes $1,000 in profit and the value of this company is $20,000, this means that the price to earnings ratio of this company is 20.

Investors are willing to pay $20 for every $1 that the company makes in profit. 20.

And by the way, the PE ratio is available online on any public company.

If you're interested in a stock, you want to allocate 5% of your earnings in a month to that stock, then a great way to do it is to continuously invest and put a timer like every month, invest a small amount of money into a company.

The second thing I look for is dividends.

Did you know that slow and steady stocks share a percentage of their profits every year with shareholders?

If you invest $1,000 in a company with a 3% dividend, that means that if fixed, the company will pay you $30 every year.

That is in addition to the profit you would make if the stock went up.

So it's not just about the stock price going up.

It's also about that $30 you get every year as dividend.

So it's within my magic range of 20 to 30.

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I studied stocks for 1 month. Here is how I invested in 100 stocks.

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