The Step by Step Guide of Stock Investing

Think independently by doing your own research and analysis, and avoid following the crowd. Consider index funds like the S&P 500 to invest without chasing hype.

Learn how stocks represent ownership in a company, how buying shares works, and how dividends can reward investors. Explore how the stock market, ticker symbols, and long-term growth influence wealth.

Explore common and preferred stocks, voting rights, and dividends, and learn how capital appreciation, compounding, and dividend income build wealth through stock investing.

Explore index funds, including broad market, sector, and bond funds, that track market indexes with a representative stock sample, enabling long-term diversification and exposure to rising or falling rates.

This live dollar cost averaging demo shows investing 1000 quarterly in the S&P 500 ETF, tracking purchases, the average price, and a ~5% profit.

Explore the moving average strategy to identify uptrends and downtrends, buy when the 50 moving average is above the 150 moving average, and sell on crossovers or downtrends.

Identify a stock's fair value before investing. Spot signs of overvaluation and undervaluation, including hype, bear markets, industry crises, geopolitical events, or legal actions.

Master discounted cash flow valuation by projecting future cash flows over 20 years and discounting to present value to determine a stock’s intrinsic value, illustrated with Google.

Apply the price to growth ratio for growth companies with rising revenue and negative profits, using price to sales and the PSG ratio, as shown in Airbnb's case study.

Calculate the fair value of Amazon and Coca-Cola, compare to current price to judge overvalued or undervalued, and select the best stock valuation method to derive a price.

Assess Amazon and Coca-Cola using a discounted cash flow method to determine fair value and valuation status; conclude Amazon is undervalued by about 20%.

Apply the dividend discount model to Coca-Cola, update risk-free rate and market risk premium, compute annual dividend payout, growth rate, beta, and intrinsic share price.

Assess Microsoft and Citibank using qualitative and quantitative analysis to identify moats, switching costs, and bank-specific price-to-book valuation; apply growth-focused dcf for Microsoft and price-to-book for Citibank.