Interested in learning about investing and the various career paths it opens? Discover the fundamentals of investing, the challenges associated with learning investing, and how to make the process easier. Also, get a glimpse into the rewards that come with successful investing.
Key Insights
- Investing involves dedicating money to assets that increase in value over time, including stocks, bonds, real estate, and more. The goal is to generate returns from invested assets.
- Learning investing can be challenging due to the volume and speed of information, finding reliable resources, and understanding the reactionary market. However, spending time watching the market and connecting with a mentor can make the learning process easier.
- Career paths closely related to investing include financial analytics, banking, and accounting. These fields require a strong understanding of finance and mathematics, and their functions and learning process differ from investing.
- Learning to invest is not a get-rich-quick scheme but takes time to fully grasp. It's crucial to practice emotional control and patience to navigate through the challenges of investing successfully.
- Noble Desktop provides hands-on training that helps in learning investing. They offer a variety of investing and financial classes that cater to various scheduling requirements and learning styles.
- Investing careers can be profitable. For instance, financial analysts, who examine financial information to make business decisions, can earn attractive salaries, thus making the learning process worthwhile.
After looking into investing, you may be worried that learning will take a lot of hard work. Of course, there is always a level of difficulty when learning a new skill. You may have an easier time learning to invest if you understand finance and have more time to dedicate to learning; someone with more free time to learn will have an easier time than someone who does not.
No matter your current schedule or your comfort level with investing, plenty of tools are available to make the learning process easier than you think.
What is Investing?
Investing is dedicating money to purchasing assets that increase in value over time. The main function of investing is to generate returns from invested assets. Investors can invest in several kinds of investments, including stocks, bonds, funds, trusts, private equity, and real estate. Investing in almost any industry can help build capital for businesses.
Investing puts money to work. On the surface, investing can appear like saving money; however, saving money sits in an account, gaining little per year, as saving accounts have an average of 0.7% growth per year. Investors can choose to actively invest, which means they manage their portfolio or passively invest, which means they take a less involved approach to investing. They can also choose to invest in high-growth companies with higher Price-earnings (P/E) or invest in companies that have lower P/E but have higher dividend yields. Both approaches can pay large sums; it depends on how much risk they want to include in their investment portfolios.
Read more about what investing is and why you should learn it.
What Can You Do with Investing?
When you think of investing, the image that comes to mind is Stock Brokers frantically calling in trades as they watch the numbers scroll by on the screen. Stock Brokers are a large part of the investing world. They deal with the stock market every single day. They help keep the economy moving. However, there is more to investing than just stock brokers.
With the internet, anyone can invest in the market using mobile apps. You can also invest to save for retirement or various other reasons. When starting with investing, you want to start an investment portfolio. Often, these portfolios include bonds, stocks, mutual funds, Exchange Traded Funds (ETFs), real estate, and cash equivalents. However, some people choose to invest their money in more unusual ways. One of the key parts of investing is choosing assets that will increase in value over time. Investments can be physical assets as well. One good way to invest is to buy a vacation or rental property that you can rent out. This option allows the money you used to purchase the property to bring more money back to you. Others invest in other items like cars, handbags, or even watches. Each of these items needs a lot of research to ensure they are worth purchasing and if they will bring in more money if sold later.
What Are the Most Challenging Parts of Learning Investing?
As with learning any new skills, some concepts will come to you easier than others. Investing is no different. The concepts people find most challenging are subjective since everyone has different abilities and strengths. For example, someone with a finance background may find financial ratios easier to understand than someone without that background. However, here are the most common challenging aspects of investing.
- Deciding when to sell. When first learning to invest, most of your learning will focus on when to buy since that is where you are in the process; however, to see your profits, you will need to know when to sell. This takes time market watching to fully grasp the perfect moment to sell. Many beginners struggle with this concept and sell too early or too late.
- The volume and speed of information. Solid investing may involve taking in thousands of data points throughout the day with the internet. Any time anything changes, there is another resource to look at. Beginners struggle to separate the information to know what is important and what isn't. Over time, with practice, you can pick out the information you need and then discard the rest. However, when just starting, you won't know the information you need to make informed decisions and may spend too much time going through all the information without making a decision.
- Finding the right reliable resources. With so many information resources available, you will not know what resources to trust immediately. Especially if you find resources contradicting each other, figuring out what you can trust regularly will come to you the more research you conduct.
- Understanding the reactionary market. This is where many beginners get burned, as they will pull money out when it starts to drop when inaccurate information hits the market. Those numbers may continue to drop until that information gets corrected. With time investors learn to be patient and watch the markets before pulling their money out.
How Does Learning Investing Compare to Other Fields?
If you are interested in entering the financial sector by investing, you may wonder what other career paths you could take and how the learning process compares to investing. Every industry requires finance to succeed; you will often find entire financial departments within companies. Fields closely related to investing include financial analytics and banking; however, you may also consider accounting as it is still within the financial industry. These career fields require a strong understanding of finance and mathematics, but their functions and learning process are quite different.
A large part of investing is understanding the marketing; this is where Financial Analysts come in. Those in this position examine financial information to make business decisions. They examine historical and projected profitability along with cash flow and risk. Often investors will work with or act as their own financial analysts to understand their investments and know where to make their next move. This position is data intensive and will require specialized training in various data-based programs. Investment firms recommend spending time as a financial analyst before becoming an investor; however, everyone can invest and grow a portfolio without becoming a financial analyst.
Moving further away from investing in the financial sector, you may choose to pursue banking or accounting. Banking focuses on meeting the financial needs of its clients, whether they are individuals or institutions. Those in these positions work for one of the thousands of banks across the country. These positions deal with money directly, while the other two are more analysis based. Accounting focuses on the flow of money, analyzing and tracking it. Those in this position must keep accurate reports of what has already happened financially. Learning the skills of these positions can help you become financially literate and help you keep track of your earnings and spending in investing, making the investing process easier.
How to Make Investing Easier to Learn
Unfortunately, some aspects of learning investing are challenging; however, with these challenges, it is more rewarding when you make money. Thankfully, there are some ways to make those challenging concepts easier to learn. Here are some tips that experts suggest.
- Spend time watching the market. Before learning to invest, you can watch the markets to see how they fluctuate. Doing this for some time, one will start recognizing market patterns. Understanding these patterns can help with deciding when to sell. This can also help with knowing what to look for in your research.
- Connect with a mentor. There are thousands of successful investors. Taking on a mentor can help you learn secrets of trading that cannot be taught in classrooms or online. You will also see firsthand how they make trades. You can ask them questions and learn their process to make more challenging aspects easier. They will also better understand the reactionary market, and they can guide you through, so you don't lose a lot of money.
Ways to Navigate Through the Challenges
These challenges may cause stress and become overwhelming; however, these challenges are no reason to give up learning to invest. Investing is not a get-rich-quick scheme and will take time to fully grasp. You can practice a few things to help make these challenges easier to navigate.
- Emotional control. Any investor will tell you how important it is to maintain a level head when trading. This is no different when dealing with the challenges of investing. When you become stressed, you will only look at some information in front of you and make uninformed decisions. When facing these challenges, practicing emotional control is a good way to keep yourself looking at the facts. It is difficult to master; however, without emotional control, you can face burnout or lose money from these uninformed decisions. Take a step back and relax before getting overwhelmed and making poor decisions.
- Patience. When investing, you may want to jump in and start buying and selling immediately. You will also have the urge to sell the moment you see stock starting to drop. It is important to remain patient. Markets will fluctuate multiple times a day, and you will want to stay calm and take a moment to see what the market is doing before making a decision.
Learn Investing with Hands-on Training at Noble Desktop
Noble Desktop provides an array of Investing and Financial classes that meet various scheduling requirements and learning styles. No matter how you enroll in these courses, students will learn from expert instructors in small classes. Students may attend in-person training at Noble's Manhattan campus or remotely from anywhere. In addition to the courses, all students can retake the course within one year of completing it for no extra charge, giving them more time to hone their skills.
For those interested in beginning their investment journey, Noble offers a short introduction course, Stock Market Investing, teaching students the fundamentals of the stock market and how to invest. Students will learn what moves the stock market and how investors value stocks. Students will understand P/E ratios and DCF analysis as they dive into different financial statements. While this course does not provide enough information to start your investing career, it does provide vital information that will help you out in your career and get you on the right path.
Students may consider the Financial Analysts Training Program to jump-start a career in the financial sector or with investing. In the program, students work with financial modeling and valuation. As students learn basic and advanced features of Microsoft Excel, they learn to utilize the program for long-term planning, financial functions, and cash flow projection. Those interested in becoming Financial Analysts may also consider the Python for Finance Bootcamp. This course teaches how to use the Python programming language’s financial libraries to gather and manipulate financial data. Both of these courses can jump-start your career in investing!
