Many people don't realize that you need to understand how to properly invest in stocks before you can start. These days, people often think of stocks as gambling, but in reality, with knowledge and strategy, stocks are a powerful tool to grow your assets. When I first started, I didn't know these basics and struggled a bit, so I’ve organized them this time.

First, you need to clearly understand what stocks are. Stocks are securities that represent ownership in a company, and buying them means owning a part of that company. You can also receive dividends and aim for capital gains. For example, owning one share of Samsung Electronics stock means owning about 0.0000018% of the company’s total shares.

However, not everyone is suited for stock investing. You should first consider whether you are truly willing to spend time studying and whether you have the psychological capacity to handle losses. Investing in high-quality stocks long-term can grow your capital through compound interest, and looking at the S&P 500 index, it has recorded an average annual return of about 10% since 1957. But short-term volatility is also significant; during the COVID-19 pandemic in 2020, the index dropped 34% in just one month.

The most important part of learning how to invest in stocks is choosing your trading method. You can invest directly in individual stocks or diversify through ETFs or funds. Recently, fractional trading and dollar-cost averaging have become popular among beginners because they allow investing small amounts in expensive stocks.

Opening an account is simpler than you might think. It can be done in just a few minutes via a smartphone app. All you need is an ID, and you can choose between a standard brokerage account, ISA, or CMA. The standard account is used for trading, while an ISA offers tax benefits. Fees vary by brokerage, so choosing a cheaper one from the start can save you a lot of money in the long run.

There are two main ways to analyze stocks. Technical analysis predicts future price movements based on past charts and trading volume, while fundamental analysis assesses intrinsic value based on financial statements and company performance. Both are useful, but beginners should start with fundamental analysis.

There are also two main investment strategies. Short-term trading aims for quick profits but involves higher risks and transaction costs. Long-term investing involves holding stocks for over five years to benefit from compound growth, a strategy used by investors like Warren Buffett.

Diversification is essential. Don’t put all your funds into a single stock; holding shares in multiple companies reduces risk. Setting stop-loss orders and regularly rebalancing your portfolio are also important. Instead of investing all at once, it’s good to invest a fixed amount each month as a strategy.

Key tips for learning how to invest in stocks include starting small to gain experience. Don’t get caught up in themes like hot stocks or stocks that hit the upper limit on the first day. Make decisions based on objective analysis. Develop habits like checking economic news for 30 minutes daily or reviewing quarterly earnings reports weekly. Keeping an investment journal to record why you bought a stock and what the outcome was can help analyze your patterns.

Ultimately, stock investing is a marathon. Don’t rush; learn steadily and proceed cautiously. Remember that thorough analysis and risk management are the keys to success.