Investment, Coding and Actuary

Getting better day by day…

Starting with the basics – Investment 101

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Yes, yes, yes… I know I have been taking Corporate Finance, Accounting and Economics classes and even sat a CFA exam already, but what do I really know about investment? Yes I have participated in stock investment competition during university before, but what do I REALLY know what was I doing? Hardly so.

So it does not hurt to admit that I know probably no more than a layman of finance. But I believe just like everything else, learning to invest is a thing that I can pick up from scratch and become good at it as time goes on. It is healthy to feel the competition and the noise around shouting should and shouldn’t, buys and sells, but at the bottom do I really trust what I read? I believe in personal judgement and that is something I can be good at. Plus the fact that I am young and smart. And I will do this myself.

Then let’s begin, at the beginning.

To kick start my journey, I use the following website for starters:

http://www.fool.com/investing/basics/index.aspx

Along is something interesting I found while going through the basics:

Active vs. passive strategies of investment means the difference between actively pick stocks,bonds and other investment while passive means hold following an index.

Speculative investment can be as simple as invest money in a business that you don’t understand. This is gamble, not invest.

The spread between bid and ask is large for stocks trading at a small volume, to compensate for the risk the exchange professionals take. Limit orders is setting own bid/ask price.

There are full-service brokers or discount brokers. Both offer a cash account or a margin account. The cash account has all the money I actually have and the margin account let me purchase stocks with borrowed money. There are margin loans for brokers to make money.

Let’s continue with the basics next time.

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Author: jam3sch3n

An actuarial student with a keen interest in investment and coding.

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