Want to trade stocks at the university?5 tips to start

I started researching investment at the age of 15, and started to build a portfolio the year I entered university. During college, I learned how to manage my investment without affecting my studies. Based on this experience, I have provided five tips to help student investors make the most of their college time and investment.

Key points

  • Before you start, please pay attention to your investment motives.
  • Understanding investor psychology will prevent you from making wrong investment decisions.
  • Before proposing an investment strategy, please consider your schedule.
  • Use the skills you developed in school and apply them to your investment strategy.
  • Connect with individuals who are interested in investing.

1. Ask yourself why you want to be an investor

Before delving into how to invest, it is important to consider why you should invest. Contrary to what popular culture might lead us to believe, achieving long-term investment success requires patience, hard work, time, and psychological discipline. You only have a few years in university, and it takes a lot of effort to get good academic results. Ask yourself whether spending limited time and energy on investment is right for you. Weigh it against other major commitments you can pursue, such as completing a second major, learning a foreign language, working for a professor, completing an internship, or participating in sports and community groups. Although you can do many of these things in addition to your investment and university studies, the promises you can actually fulfill are limited.

Different investors have different motivations. I know that the goal of an investor is to fund the education of 1,000 children. Others are motivated by simpler goals, such as the desire to accumulate wealth for themselves and their families. My own long-term goal is to establish a charity fund to support key services in my hometown of Vancouver. No matter what your goals are, having a strong understanding of why you want to be an investor will help your long-term resilience and success.

In times of financial crisis, it is tempting to sell your investment at an unusually low price to avoid further losses. Similarly, in a period when returns continue to be high, it is difficult for people to refuse to buy overvalued securities whose prices continue to rise.Think carefully about the reason You want to invest will encourage you to persevere in your investment strategy in both good times and bad times.

2. Beware of investor psychology

As investors, our psychological habits may be our greatest ally or our greatest enemy. As mentioned above, many investors have become victims of the temptation to buy high and sell low—this is the secret of financial disaster. This temptation is often exacerbated by social pressure. As investors, we will inevitably have self-doubt and fear that we will miss the returns of other investors. However, this tendency must be resisted to avoid the temptation to seek short-term gains.

In this regard, universities can be a particularly challenging environment. During the freshman orientation day of my university, the president of the student union gave a speech in which he urged students to welcome their college life with a healthy FOMO (fear of missing out). Even so, I still think this is a bad suggestion for investors.

One of the best ways to prevent yourself from making wrong investment decisions is to let yourself understand the nature of investor psychology. On this topic, my two favorite books are “Animal Spirits”, written by Nobel Prize-winning economists George A. Akerlof and Robert J. Shiller, and Jason Zweig’s “Your Money and Your Brain” . Studying these books will help you deepen your understanding of the important role psychology plays in your own decision-making process and the entire financial market. Understanding the psychological aspects of investment will help you avoid irrational investment decisions.

Although it is not illegal to invest in student loans, you may be liable to repay the subsidized interest if the federal government finds out.

3. Take realistic strategies according to your schedule

Performing a thorough investment analysis requires a lot of attention and time. As a student, you are unlikely to have time for in-depth research. Then, it makes sense to adopt a strategy that you can actually implement in your limited free time.

Perhaps the simplest strategy is to regularly invest in a portfolio of diversified investment funds, such as index funds, exchange-traded funds (ETFs), or mutual funds. This approach may be beneficial for investors who are less interested in in-depth analysis of personal investments and are more willing to delegate the more laborious aspects of their investments to third parties. On the other hand, investors who wish to actively manage their funds will have to pay for services in the form of higher management fees.

Full-time students who want to manage their investment portfolio need a time-saving investment strategy. I choose to build my investment portfolio mainly based on companies whose prices are lower than their liquidation value. I chose this strategy because it is more suitable for quantitative analysis and monitoring. For example, I created a standard investment list to screen investment candidates. The list determined the exact price at which I bought and sold the company’s stock.Then I use the service to set up automatic alerts, for example IFTTT and Zignar Notify me when the stock reaches its specified price threshold. Through this strategy, I can gain real-world investment experience without affecting my learning.

For students who want to experience investment in person but don’t have the funds, the third option is to use an online simulator to invest, such as InvestingClue’s stock simulator. Simulators are a great way for investors to test new ideas without exposing real capital risks.

4. Invest in your knowledge

If you lack the time or resources to invest while in college, remember that the best investment you can make is to develop your knowledge. This principle also applies to students who have the time and resources to invest.

Depending on the major you choose, you may find that your university studies directly contribute to your investment education. Others may need creative ways to find the overlap between their education as investors and university courses. The major of my own choice—honoring history, focusing on the history of science—has nothing to do with investment directly. Nevertheless, I found that many of the skills I developed, such as elementary research, writing, and critical thinking, have clear applications in investment research and analysis.

No matter which field of study you choose, if you receive investment education in a proactive manner, many industry professionals will be happy to answer your questions and support your development as an investor. I strongly encourage all student investors to participate in social events and get in touch with industry professionals.

Another way to accumulate investment knowledge is to learn from the world’s greatest investors. I chose to base my knowledge on the value investing methodology developed by Warren Buffett’s mentor Benjamin Graham. I recommend Benjamin Graham’s “Smart Investor”. Another classic is “Securities Analysis,” Graham co-authored with David Dodd in 1934.In order to understand how value investing has evolved since Graham’s time, I strongly recommend learning Letter written by Warren Buffett To the shareholders of his holding company Berkshire Hathaway (BRK-A, BRK-B). These letters explain how Buffett implemented and expanded Graham’s value investing principles. These letters are particularly useful because Buffett acknowledged and reflected on his mistakes. In short, Buffett’s letter to shareholders and the classic works of Graham and Dodd provide a comprehensive introduction to the theoretical basis and practical applications of value investing.

5. Keep good company

One of the biggest advantages of being a student is the opportunity to establish contact with various people on campus. In my experience, discussing investment networks with peers can help make more nuanced investment decision-making processes. The key is to find people who are both interested in discussing investment and willing to participate in constructive debate.

Of course, this is easier said than done. I must be open to my enthusiasm for investing in building this network.It was not until the third year of college that I overcame my inhibitions and started investing website I am here to share my views on investment. I was surprised to find that many people who I never thought would be interested in investing asked me questions and provided feedback about my work. For the first time, I started to build a peer network to discuss investment ideas.

The long-term value of these communities cannot be overstated. At the same time, it is important to remember that people tend to emphasize their investment success while hiding or playing down their mistakes. Therefore, it is wise to conduct investment discussions with healthy skepticism.

Bottom line

Learning to invest in college is a challenge. Students who respond to this challenge with a clear sense of purpose, realistic investment strategies, and a commitment to learn from the best people can use their college time to lay a solid foundation for their investment future. who knows? One day, students may be studying your investment philosophy.

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