You’ve probably heard the saying that you need to study stocks properly to make a profit. These days, I see a lot of people around me starting to invest in stocks, but most of them begin with vague expectations at first, end up suffering losses, and then regret it. So this time, I’ve put together everything from the basics of stock study that beginners must know to practical strategies.

First, you need to be clear about what stocks are. Stocks are simply securities that represent ownership in a company. When you buy stocks, you own a portion of that company. For example, if you hold 1 share of Samsung Electronics, it means you own about 0.0000018% of Samsung Electronics as a whole. When you own a stake, if the company does well, you can receive dividends, and if the stock price rises, you can also gain through capital gains.

But stocks aren’t for everyone. You need to identify your investing style, your financial situation, and your ability to take risks first. In particular, you should keep in mind that stock prices can drop sharply in a short period of time. Like when the S&P 500 fell 34% in one month during the COVID-19 pandemic in March 2020. You should think first about whether you can endure it psychologically.

There are two main ways to trade stocks. You can invest directly in individual stocks, or you can use indirect investment products like ETFs or funds. Individual stocks may offer higher returns, but they also come with higher risk. On the other hand, ETFs and funds are diversified across multiple stocks, so their risk is generally lower. Fractional trading and regular (dollar-cost averaging) investing, which are popular these days, are really great for beginners. If you automatically invest a set amount every month, you can enjoy the effects of compound interest, which helps your assets grow over the long term.

Opening a stock account is simpler than you might think. You can finish it in just a few minutes using a smartphone app. All you need is an ID. Account types include general brokerage accounts, ISA, CMA, and more, but for beginners, it’s generally best to start with a general brokerage account. Also, if you recently opened a deposit and withdrawal account at a financial institution, it takes 20 business days before you can open an account at another securities firm. It’s due to financial crime prevention regulations.

When opening an account, the most important thing is fees. Since fees differ from one securities firm to another, you should compare them carefully. Because people tend to keep using the broker they started with, choosing a low-cost option from the beginning is the smart move. You can refer to the Korea Financial Investment Association website, where you can compare fees at a glance.

The very first thing you should learn when studying stocks is how to analyze them. There are two types: technical analysis and fundamental analysis. Technical analysis is a method of predicting future stock prices based on past price movements and trading volume. You use indicators like moving averages or MACD to time your trades. Fundamental analysis is about evaluating a stock’s true value by analyzing a company’s financial statements and management performance. You look at metrics such as PER, PBR, and ROE.

Investment strategy is also important, and it’s generally divided into short-term and long-term. Short-term speculation aims for quick profits, but it comes with higher risk and also higher trading costs. Long-term investing is a strategy where you hold stocks for at least 5 years. Thanks to compound effects, your returns increase significantly as time goes by. Historically, the S&P 500 has recorded an average annual return of about 10% since 1957.

Risk management is truly crucial. Diversification is the key. Don’t buy only one company’s stock—invest across multiple companies and different sectors. Set stop-loss orders as well. If the stock price falls below a certain level, it automatically sells to limit your losses. Regularly rebalance your portfolio, and don’t invest all your money at once—invest in portions over time is also a good approach.

Here are some tips you should remember when studying stocks. First, start with a small amount. Building experience is important. Second, don’t invest by following what others are doing. Don’t get swept up in the craze for theme stocks or “double-up” stocks. You should make decisions based on objective analysis. Third, read economic news for at least 30 minutes a day and monitor the stocks you’re interested in. Fourth, keep an investment journal. If you record why you bought each stock and what the outcome was, you can identify your own patterns.

In conclusion, studying stocks isn’t something you do for just one or two months—it’s something you need to keep doing consistently. Thorough analysis, risk management, and an appropriate investment strategy are the keys to success. If you proceed steadily and cautiously like a marathon, you can fully achieve your long-term goal of growing your assets.