Stock Market for Beginners 2022 | How To Invest In Stocks

In this video, I will teach you how to invest in stocks as a beginner in 2022.

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⏰ Timestamps ⏰:
0:00 – Introduction
0:43 – What Will We Cover In This Video?
1:44 – Why Should You Listen to Me?
3:01 – Free Gifts & Added Value
3:52 – Why Should You Invest In Stocks?
8:56 – Example of Compound Interest
10:15 – Fundamentals of The Stock Market
12:21 – Types of Investments
14:19 – What is a Stock?
15:25 – What is Market Cap?
17:15 – Why Do Companies Issue Stock?
17:52 – Preferred Stock vs Common Stock
18:48 – How Are Stocks Categorized?
20:15 – Stock Categories Visualized
20:56 – Growth, Income, & Value Stocks
23:02 – Stock Market Sectors
23:37 – What is Risk?
25:01 – Types of Risk
28:09 – Types of Stock/Equities (What to Buy?)
28:54 – Individual Stocks
30:33 – Mutual Funds
32:20 – Index Funds
33:56 – ETFs
34:32 – REITs
36:06 – How To Evaluate a Company
36:38 – 3 Financial Statements
37:59 – 5 Types of Financial Ratios
38:24 – P/E Ratio (Price to Earnings)
41:55 – PEG Ratio
43:42 – P/B Ratio (Price to Book)
46:04 – ROA (Return on Assets)
49:58 – ROE (Return on Equity)
53:21 – Current Ratio
55:44 – Quick Ratio
58:39 – Debt to Equity
1:00:58 – Asset Turnover
1:03:10 – What The Numbers DON’T Tell You
1:06:18 – moomoo Introduction
1:08:35 – BUYING OUR FIRST STOCK
1:13:05 – How to Buy A Stock LIVE
1:14:15 – Market & Limit Orders
1:21:15 – How to Sell A Stock LIVE
1:25:26 – Taxes & Fees
1:27:36 – Free Gifts & Added Value
1:28:23 – SHARE THIS VIDEO!

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Hey everybody welcome back to whiteboard Finance my name is marco and i’m here to Help you master your money and build Your wealth in today’s video i have a Free master class or a free beginners Course on how to actually get started Investing in stocks and the stock market So even if you’re a beginner Intermediate investor or even an Advanced investor i promise you there’s Golden nuggets all throughout this video We’ll be talking about what a stock Actually is Different sizes of companies Different calculations to make sure You’re making the right investment and We’ll also be buying and selling a stock Live later in this video so let’s get Right into it so this presentation is Called how to invest in stocks for Beginners step by step presented by me Marco whiteboard finance so what are we Going to cover in this video number one Is why should you even listen to me so There’s a few points on my credibility Uh number two we’re going to be talking About free gifts and added value you’re Going to be getting some free stocks Based on some of the promotions that we Have going on right now Number three is why should you invest in The stock market in the first place The fundamentals of the stock market so You know exactly how it works different

Types of investments going over what a Stock actually is Number seven is why do companies even Issue stocks to begin with uh how are Stocks categorized we’re going to Understand risk risk is a big part of Investing and it’s a must know for every Investor out there number 10 types of Stocks and equities we’ll be talking About what to buy Number 11 is how to evaluate a company Reading different financial statements And ratios number 12 is the big one We’re actually going to be doing a live Demo of buying a stock this is going to Be an actual purchase of a stock and Then number 13 we’re going to be going Over taxes and fees incurred with buying And selling stocks Okay so why should you listen to me so At the time of this recording i have Over 391 000 invested in the stock Market this is not to brag because to Some people this is a big number to some People this is a really small number the Reason i’m saying this is because i Actually have my money where my mouth is And i do have skin in the game so this Is just a snapshot of some of my Portfolios here the second part is i’ve Been investing in the stock market for Over 16 years i’m 34 at the time of this Recording i’ve been investing since i Was 16 years old i started with a trade

King account some of the older people Watching this video may or may not Remember trade king but in this video We’ll be using moomoo i also use m1 Finance vanguard td ameritrade and a few Other brokerages as well And then also finally i actually have a Bachelor’s degree in finance and Entrepreneurship i graduated in december Of 2010 with a finance degree and i’ve Also worked in finance and commercial Real estate a majority of my career i’ve Worked at publicly traded banks publicly Traded real estate investment companies And i’ve also built as you can see here In the third picture Homes from the ground up So finally i’ve been providing free Value on youtube since november of 2017 At the time of this recording i have Around 815 000 subscribers so before we Get started there’s free gifts and added Value that i mentioned earlier if you Want to download this presentation for Free there’s a link in the description Below you can download this entire Powerpoint presentation and re-watch it As many times as you want no charge Attached of course Free stocks you can use the link below In this this video we’re going to be Using moomoo this is the platform that I’ll personally be buying and selling Stocks with in this video if you want to

Sign up with mumu you can click on that Link to get a free stock from them in The presentation or you can use the link In the description below And then finally whiteboard finance University if you want to join the Waiting list i will be creating a Community that has courses uh live q a With me once a week so you can pick my Brain to see what i’m buying selling Career advice pretty much anything you Guys need i’ll be made available in this University and then we’ll also have a Community discord or chat room available So let’s get right into this why should You even invest in the stock market to Begin with well historically it’s been One of the best tools to grow wealth Throughout human history the market has Averaged a 10 annual return on Investment historically over time and Then the second biggest bullet point Which we’re going through right now at The time this recording is high Inflation so you have to realize savers Are losers people that just save their Money and under their mattress or in Their closet that money is only worth Its face value it’s not growing or Working for you even though inflation is Increasing so assets are more important Than just having cash you’re actually Losing purchasing power by not investing So the current inflation is actually at

Seven point nine percent uh there was Just a recent study that came out that It’s actually at eight point five Percent so for example if you’re earning Zero percent in cash because it’s just Sitting in your closet or in a mattress And everything else is going up by eight And a half percent that means you are Losing that purchasing power year over Year your money sitting in your closet Can buy less and less over time that’s Why it’s paramount to start investing Bullet point number three it’s never Been cheaper to invest so zero dollar Trades and fees are actually the norm When i first started trading with Tradeking 16 years ago it actually cost 4.95 a trade to buy and sell stocks just To be able to buy and sell it’s costing You 4.95 a trade now it’s typically zero So there’s low expense ratios also for Solid investments these are provided Through vanguard and other big Institutions which we’ll be talking About later in this video these come in The form of etfs index funds Reits so if all these things are Unfamiliar to you we’ll be discussing All this later in the video and then Finally you don’t have to be a genius to Invest you don’t have to be someone Burning the midnight oil and studying Until two in the morning to find the Perfect company there are strategies

That help you grow your wealth over time Which we’ll be discussing in this video So what are some common motivations of People wanting to invest well people Want to invest in order to build wealth This is having your net worth increase Over time my channel focuses on this and You know this if you’ve been watching me For the past four or five years now on Youtube Some people they invest the support of Family some people invest to prepare for Retirement but the most important thing Is bullet point number two which is Setting attainable goals you need to be Specific you can’t go into this video or Into investing thinking i want to get Rich right well that’s not specific if You want to retire with a million Dollars now that’s specific that’s a Much more attainable and measurable goal You need to have a certain time frame in Mind so parents in their 40s versus a Single parent person in their 20s they Have much different time frames okay so The parents in their forties may have Two kids going to college where a single Person their twenties may have you know Much more time and less responsibility Uh in life in order to be able to invest More if possible uh finally we have Level of risk so i like to call it my Swan portfolio swan stands for sleep Well at night portfolio

And then also you have high risk high Return low risk low return again as Investors we are compensated for the Level of risk we’re taking on and then Finally we need to Set up an action plan to meet your goals When it comes to investing so here’s a Quick uh fund number that we can play With so how long would it take your Money to double so on the left column we Have your investment growth rate per Year so if your investments are growing At four percent per year it’s going to Take 18 years in the right column for Your investment to double so if you put In 10 grand and your investment is Growing four percent it’s going to take Eighteen years for that ten grand to Turn into twenty grand or twenty Thousand dollars and then the higher the Rate of return the the less number of Years it takes to double so if we look At the bottom column or the bottom row Excuse me if your investment grew at 12 Percent per year remember remember the Stock market has historically returned a 10 percent um growth rate or return on Investment historically so if we take 12 Percent per year that investment or that Ten thousand dollars would take six Years to turn into twenty thousand Dollars makes sense And then finally why should you invest In the stock market well it’s because of

Compound interest so if i’m sure you Guys have heard compound interest Floating around on the internet but if You’re not familiar with it compound Interest is the interest on a loan or Deposit calculated based on both the Initial principal and the accumulated Interest from previous periods so your Initial principle is just the initial Amount that you invest or choose to take On So think of this as your interest Earning interest so according to albert Einstein he used to say compound Interest is the eighth wonder of the World he who understands it earns it he Who doesn’t pays it this is just like You being late on credit card payments It feels like you can never get your Head above water because the interest on Your credit card is so high makes sense So at first this quote might seem like a Bit of an exaggeration but the math Behind it shows that it’s not so let’s Take a look at a compound interest Example right now okay so here’s an Example of compound interest let’s say We have ten thousand dollars we can Either have this ten thousand dollars Sitting in our mattress or in our closet As i mentioned earlier or we can have This money working for us so if we have Ten thousand dollars uh we’re going to Save it for five years and we have a

Rate of return of five percent so after Five years our uh our ten thousand Dollars turns into twelve thousand seven Hundred sixty three so you’re probably Thinking yourself oh big whoop marco you Know that’s not even a big deal right Well let’s actually use the historical Rate of return on uh stocks which is ten Percent so now that ten thousand dollars After five years by doing nothing turns Into sixteen thousand one hundred and Five Okay let’s let’s extend our time frame To fifteen years Well guess what after fifteen years at Ten percent your ten thousand dollars is Now uh four x and it’s become 41 773 And let’s say we’re invested for 30 Years let’s say you start early and you Want to save for retirement well guess What our 10 grand earning 10 percent has Now turned into 174 494 dollars see how powerful that is So if we go back to this you can see why Compound interest is so important and Why investing is so important instead of Just keeping your cash under the Mattress So now let’s talk about the fundamentals Of the stock market so here’s a quick History of stocks and the stock market Or markets throughout the world One of the first examples is in the

1600s a dutch shipping company called The dutch east india company sold shares Of itself which is equity so we’re going To be talking about equity shares and Stock later in this video they did this To raise capital to expand their Business operations in 1611 a stock Exchange opened in amsterdam in response To this demand of buying and selling Shares of the dutch east india company Today stocks now trade on what we call Exchanges so a lot of this is going to Be familiar to you so here’s some Important exchanges in the united states And globally so in america we have the American stock exchange amex i’m sure You’ve heard of this this trades small Caps which we’ll talk about later in This video small market capitalizations That’s what that means and derivatives We’re going to be talking about the cboe Which is the chicago board of options Exchange they’re the largest market for Options which i’m sure you’ve heard of And if you haven’t we’ll talk about that Nasdaq stock market this is tech heavy This is where a lot of tech companies Are traded the new york stock exchange Which i’m sure everyone has heard of if You’re watching this video this trades More than 8 000 publicly traded Companies and it amounts for 30 percent Of the world’s trading and then overseas We have the shanghai stock exchange we

Have euro next and we also have the Japanese exchange group so to put some Of this in perspective hopefully you Guys can see this You can see that each square On this chart is worth 100 billion Dollars yes that’s billion with a b so You can see that the new york stock Exchange in purple Accounts for 31.5 percent of the world’s Largest stock markets okay and then we Have the nasdaq at 14.5 percent and then The rest uh is totaling 89.5 trillion That’s that’s all of them combined but All the other exchanges total for 21.2 Percent so you can see how truly large The new york stock exchange and the Nasdaq really is so moving on here we Have different types of investments so There’s stocks there’s bonds there’s Mutual funds there’s etfs there’s cds I’m sure you’ve heard of a lot of these But what do they really mean so very Simply this is just a high level Overview and then we’ll dig a little bit Deeper later in the video stocks are Just an ownership interest of a company So we’re going to elaborate on this much More in detail bonds if stocks are Equity meaning uh they are owning an Equitable portion of a company a slice Of a pie which we’ll talk about later That means bonds are debt so companies And governments they issue debt via

Bonds the bond issuers collect money From the investor at face value and then They repay the investor back with Interest semi-annually for a set period Of time before paying back the principal Uh we’ll talk about this later mutual Funds are essentially when a group of Investors pull the assets of all all of Their investments together to increase Their buying power and then we have Exchange traded funds and then cds which Are typically offered by savings and Loans institutions which we’ll talk About later in the video And then we have alternative investments Or assets we have commodities which are Typically oil corn soybeans there’s a Hundred plus different traded Commodities on different exchanges And then we also have options which Allow investors to bet on whether shares Will rise or fall in the future so for Example if i think a stock that is fifty Dollars will go up to fifty five dollars By a certain time period i can purchase A call option on it so there’s hedge Funds so similar to mutual funds but With more specialized strategies we Talked about mutual funds in the Previous slide we have precious metals Which i’m sure you’ve all heard of this Comes in the form of physical gold Silver platinum Palladium et cetera et cetera

And then we also have collectibles so These are types of alternative Investments we have cars sports cards Art these are very niche however you Need to be an expert in this in order to Make uh profit and then finally we have Real estate which is a huge uh subset or An alternative investment to stocks so Let’s go over what a stock is exactly Okay this is kind of where the rubber Meets the road in the presentation a Stock is a share of ownership in a Company so think of each share being a Slice of pizza so if you have a piece of Pizza that’s you know round each slice Is a piece of equity or a slice of a Stock or a share of a stock so buying Shares gives you equity aka ownership And shares of a company so let’s take Apple inc for example so apple Everyone’s heard of apple you know There’s apple computers i’m using an Apple macbook for this presentation Right now their ticker symbol which is Just those four letters to the right of Apple inc Is aapl every publicly traded company Has a ticker symbol So they have uh shares outstanding so This is how many slices of the pie they Have available to be eaten okay so let’s Use that analogy the number of shares They have is 16.39 billion so that’s a lot of zeros

Which you can see right there and at the Time of this recording the share price Of apple is 163.98 So when you take your shares outstanding Multiplied by the share price this gives You your market cap or your market Capitalization this is just simply Shares outstanding multiply by share Price so if we take 16.39 billion shares multiplied by 163.98 Per share we get a market cap of 2.68 Trillion you can actually see the full Number to the right right there so Companies are typically measured and Categorized by their market cap this is Why it’s so important market cap Obviously changes over time because Share prices and shares outstanding can Change over time so buying and selling a Company’s stock is what drives the share Price makes sense so in order to give You a better understanding i’m going to Go to the ipad here and use this apple Pencil that i got and i’m actually going To give you An example okay So if this is the pie that we’re talking About let’s pretend that this is uh just Some random company we’ll call it uh Company marco ticker symbol marco okay So if this uh pie Has four shares or this company has four Shares instead of apple’s 16.39 billion

Let’s just do this for easy numbers and Each share let’s say is worth 75 A share okay What is the market cap of this company So let’s use our formula it’s simply Just the shares outstanding which we Know is for Uh multiplied by the share price which We know is 75 dollars a share so if we Take 4 times 75 This equals Three hundred dollars okay so this Company this hypothetical company called Marco is worth three hundred dollars as Their market cap makes sense Okay so now that we know how to Calculate market cap let’s understand Why do these companies even issue stocks In the first place so corporations issue Stocks to raise money for their business If you remember the example of the east India trading company that we talked About earlier in the video you know that They issued pieces of themselves in Order to raise money for certain things Well in modern day uh companies Typically people issue stocks to fund a New product line For r d for research and development For investment and growth this is what a Lot of tech companies are doing over the Past five or six years or so And then also to potentially pay off Debt and there’s two types of stocks

There’s not just uh one stock you know Covers at all there’s preferred stock And there’s common stock typically with Preferred stock you have no voting Rights so as shareholders you have the Right to vote on certain issues That come within with investing in a Publicly traded company with preferred Stock you don’t have those voting rights With common stock you do have voting Rights however you are the last in line To get paid in case of a liquidation and You’re the last to get paid a dividend So heaven forbid if a company that you Invested in goes bankrupt and you need To liquidate like lehman brothers for Example Preferred stock owners they may get paid Something but common stock owners they Are last in line to get paid out so You’re usually buying common stocks when Buying stocks so when you hear someone Saying hey bro i bought some stocks in Apple i bought some shares of apple They’re typically buying common stock so If we go back to the presentation There’s different ways that stocks are Categorized this is important so please Pay attention we typically have a large Cap mid cap and small cap stocks the Reason for this is because we’re going Back to that calculation of market cap There’s shares outstanding times share Price which we went over just a couple

Minutes ago so the way these are Classified is typically large cap so This would be a company like visa for Example this is when their shares Outstanding times their share price Equals 10 billion or greater Typically this is hard to achieve Massive growth due to their size so These are more mature companies or Companies that have been around for a While for example These companies have a proven track Record over many years and they Frequently offer dividends Then we have mid cap stocks this is Their market cap of 2 billion to 10 Billion dollars they’re not quite as Large as large caps and they’re more Established Than small caps if that makes sense These companies are often the target of Mergers and acquisitions For wanting to be absorbed into another Company to grow a certain product line For example And then we have small cap which is 300 Million to 2 billion dollars in market Cap these are typically younger and Seeking aggressive growth these are the Companies that want to grow Typically disrupt an industry like uber For example And then they’re higher risk and don’t Usually offer dividends because they’re

Instead of paying out a dividend because They’re not as established they want to Plow back all that money into research And development So how are these stocks categorized so If you guys are familiar with any of Your you know retirement accounts or 401k accounts typically they uh you’ve Seen this morningstar style box so in The bottom left uh we have value we have Blend we have growth and then on the Column going up and down we have large Cap mid cap small cap so if you’re Typically looking for a combination of These two and you’ll understand if You’re getting into a stock that is Value oriented a blend of growth and Value or typically growth oriented and You’ll be able to see if it’s a small Cap stock a mid cap stock or a large cap Stock makes sense So if we go into growth stocks These typically have big potential for Growth They may outpace the market so lately Over the past five ten years we’ve seen Companies like amazon crush it microsoft Crush it tesla is absolutely crushing it I actually did a video in april of 2018 Talking about my favorite stock for uh 2018 and it was actually microsoft and Uh at the time of that recording i Believe microsoft was sitting at 96 Dollars a share uh now it’s sitting at

Like close to 300 a share so it’s pretty Interesting what can happen in four Years So typically growth stocks offer low or No dividends because as i mentioned Earlier they’re reinvesting those Retained earnings in order to keep Growing such as amazon amazon is a Perfect example of that Second we have income stocks so income Stocks are a regular dividend payer These are your 3ms your waste Managements your verizons At t for example they have a proven Track record or business model and they Consistently increase their dividends if You want to watch my dividend portfolio Criteria video download the presentation And click this link it’ll take you to my Video to show you exactly how i invest In income producing stocks or dividend Stocks i’ve been doing that for 105 Weeks now and i’ve been updating that Every week in the community tab of my Channel that portfolio is now sitting at Like 35 000 at the time this recording And then finally we have value stocks so These are perceived to be trading below Its fundamentals uh which we’ll talk About later in the video we’ll go over All these ratios uh we have the p e Ratio and we have the pb ratio this will Be described later and then typically Value stocks are seen as unfavorable in

The marketplace so the best analogy i Can give you is value stocks are seen as A dog with fleas But if you end up taking that dog home Washing it cleaning it aka bringing in Better management better product lines Better use of capital there’s a lot of Value to be gained meaning you can get a Companion for life so that’s my Cheesy analogy of a dog with fleas Turning into a great best friend for Value stocks So how are stocks categorized continued We have stock sectors this is very Important so please pay attention this Is an area of the economy in which Businesses share a product or service so Typically there’s 11 broad sectors we Have energy we have materials we have Industrials we have consumer Discretionary we have consumer staples Healthcare financials i t aka tech Telecom utilities and then real estate You can always pause the video right Here to look at the specific examples But these are the 11 broad-based sectors In the economy So we need to understand risk Understanding risk is paramount this is The whole point of being an investor if You take anything away from this video Understand this you are compensated or Should be compensated for the amount of Risk that you take on as an investor so

Let’s describe what is risk So the risk is the chance that your Actual outcome will differ from your Expected outcome so if we had a 100 Percent guaranteed investment Earning seven percent per year i Guaranteed i would put every single Penny that i have into that investment Because it’s guaranteed right as long as You’re outpacing the rate of inflation For example but that’s beyond the scope Of this video so if you told me hey Marco i’m going to make you a guaranteed Rate of return of x you know let’s say It’s 10 percent i would invest Everything i had into that investment Because there’s no risk however we live In the real world where risk includes The chance of losing some or all of your Investment so risk should be reward as i Mentioned earlier as investors we are Compensated for the level of risk that We assume for example There’s a much higher Chance of bankruptcy if you’re investing In a startup or a higher chance of not Making any money as a startup versus a Savings account for example that’s why Your savings account right now is Earning 0.4 percent whereas investing in A startup could you know make you a Multi multi multi Depending on the company So that’s the different spectrums of

Risk so there’s different types of risk And it’s important to understand this Especially in today’s market especially At the time of this recording There’s market risk these are different Economic developments or other events Such as the fed raising interest rates For example We have liquidity risk where you can’t Sell your investment so say for example So let me back up liquidity is just Something that means hey I can easily sell stocks and bonds i’m Very liquid or i have all my money in a Savings account i’m very liquid um what Isn’t liquid would be if you owned a Commercial real estate building in the Middle of alaska you know that caters to You know only a certain demographic Right that’s very illiquid because There’s only a certain type of Demographic or person that would want to Buy a commercial real estate building You know sitting in the middle of alaska Right so that’s liquidity risk you can’t Dispose of it quickly There’s concentration risk you have too Many eggs in one basket so say for Example i wanted to own 99.9 percent of my net worth in tesla Stock right well that could be very high Reward but it could be also very high Risk because i’m concentrated all just In that one company so that’s

Concentration risk Number four is credit risk so the entity Can’t repay so say for example you’re Issued a bond by a company or by a Municipality and that company or Municipality goes broke well guess what You’re now Part of credit risk because you’re not Going to get paid back your principal or Your par value because that entity Simply can’t afford it This would be like loaning money to your Broke friend who you know is never going To pay you back right you’re you’re open To credit risk number five is inflation Risk so this is the loss of purchasing Power so for example we talked about how Inflation is actually sitting closer to 8.5 percent year over year at the time Of this recording so that means that if Your investments are earning three Percent uh let’s say in a very Conservative stock or a bond for example And inflation is ten percent you are Losing seven percent per year in Purchasing power because your investment Is only earning three inflation is Outpacing you at 10 makes sense And then finally we have uh number six Which is horizon risk your investment Time frame changes so say for example You’re you’re putting all your money Away for the down payment of a house Right you want to save 20 percent down

Payment you’re putting it in uh you know Really risky stocks and your down Payment goes to zero okay so now you Just lost your entire down payment of Your house and now your horizon has to Change okay so your investment time Frame changes it may go from a year to 10 year or from 10 years to three years You know it all just depends on what Your time frame is And then finally we have foreign Investment risk this applies to foreign Investments so say for example at the Time of this recording there’s a Conflict going on in eastern europe Between russia and ukraine say for Example all your portfolio was in Russian rubles and those collapsed right So that’s what we call foreign Investment risk or let’s say you want to Invest in a startup company in north Korea and that company gets shut down Just because well that’s that’s risk That you have to um get prepared for Okay so moving on to different stocks And equities what to buy these are just The different categories we’ll be Breaking these down individually so i’m Just going to name these very quickly so Number one are individual stocks this is Exactly what it sounds like you are Investing in individual companies such As microsoft apple 3m waste management Verizon doesn’t matter we’re just using

This as an example number two are mutual Funds such as blackrock which will break Down further later in this presentation Number three is index funds which are Offered by vanguard and many other Brokerages out there Then we have exchange traded funds which Are etfs provided by fidelity and Vanguard and a bunch of different Funds out there and then also reits this Stands for real estate investment trust Which we’ll break down in a little bit So let’s dig into types of stocks so Individual stocks the pros are that There there’s reduced or essentially no Fees Involved in owning these stocks and then Also there’s no management fee to own Them and there’s no fees to trade them Which we’ll be talking about and showing You later in this video so you have Complete control or understanding of What you own you know that you’re buying X amount of shares of tesla x amount of Shares of walmart x amount of shares of Apple so you have complete understanding Of what you own And the taxes are very easy to manage so We can either incur a capital gain or a Capital loss for the most part which We’ll talk about at the end of this Presentation some of the cons with Individual stocks is that they’re hard To diversify with so like we talked

About with concentration risk let’s say I own 99.9 percent of my net worth is in Tesla well i need to be more diversified If i want to sleep well at night who Knows what’s going to happen to the Future of a certain company right so you Need at least 20 to 100 different types Of individual stocks in order to achieve Adequate diversification in my opinion This takes more effort or time to Monitor this portfolio when it comes to Rebalancing making sure you don’t own Too much of one position for example and Then also you can be susceptible to fomo Or emotions fomo simply stands for fear Of missing out so i’m sure you’ve seen This over the past couple years where People are like dude you got to buy x Company you gotta buy y company they’re Absolutely crushing it dude you have to Buy this or you overhear something in The locker room you know at a rec center For example that’s called fomo you have The fear of missing out So let’s talk about mutual funds now so Mutual funds there they are pools of Money uh from the public in order to buy Securities so think of this as almost Like crowdfunding so you pull together a Bunch of people’s money in order to Obtain a certain objective to invest in It so the pros of a mutual fund is that They’re very liquid they’re very diverse They own a lot of different holdings for

The most part They’re typically professionally managed So we have active management where an Actual human being is managing the Portfolio versus a passive mutual fund Where it could just be an algorithm or It could be updated maybe just you know Once or twice a year This is not actively managed by a human It’s called passive management and then We have a lot of options so there’s Balanced mutual funds fixed income Mutual funds which we talked about Earlier Money markets income all that stuff so You have a lot to choose from Some of the cons though are that the Fees are higher Typically this comes in Assets under management so if you have You know let’s say you know a hundred Dollars in a in a mutual fund their fees May vary anywhere from like one to five Percent so it may cost you anywhere from One to five dollars per year just to be Able to invest in that mutual fund now If you have a million dollars it’s going To be one to five percent of a million So on and so forth typically they have Large cash holdings meaning that cash is Kind of just sitting there we talked About this with the cash sitting under The mattress analogy or the sitting in The closet analogy

Which is not actively being used And they have this for reserves they Have it for strategic purposes so you Can’t really blame them but it is a con And then you have hard to evaluate so You can’t really evaluate apples to Apples mutual fund mutual fund just Because they are very unique in what They invest in So Moving forward we have index funds which Is a basket of stocks to mimic a certain Market index as i mentioned earlier the Pros of this are that the fees are very Very very low so with the mutual fund Your fees are going to be you know one To five percent uh with index funds it Could be as low as 0.03 percent okay i’m talking three Basis points it’s a fraction of a Percent uh so they typically outperform Active management over time there have Been a bunch of studies that show this They’re very easy to own manage invest In and use to achieve your goals i have A significant portion of my net worth And index funds and etfs Just because they’re very easy to use And invest in Some of the cons are that you don’t Really have control over the holdings So you can’t really you know influence Management uh you’re not you know you’re Not a shareholder you’re not a

Member of the board for example you’re Not the portfolio manager so you really Have no say in what’s being invested in You’re just hoping that the manager is Responsible and he’s a fiduciary to your Money and he’s going to be investing in What’s it’s supposed to track which is Typically a certain market index There’s a lack of downside protection Because it’s not a hedge fund so if you Guys remember the crisis going on Just in march of 2020 a lot of people They lost a lot of money in the market Maybe 30 40 50 percent But hedge funds only lost you know 15 20 Percent for example that’s because They’re hedged to the downside which Index funds are not And they also lack different strategies That’s because they’re just trying to Mimic an index so etfs are very similar They’re a basket of stocks to mimic a Certain market sector that trade on an Exchange So you have access to many stocks you Have very low expense ratios and just Like index funds they’re very easy to Own very easy to manage very easy to Invest in uh some of the cons are that Actively managed etfs have higher fees These are similar to mutual funds okay That are actively managed You have a lack of downside protection Again it’s not a hedge fund and then

Also diversification is limited because You’re only focusing on one market Sector or one industry uh because you’re Tracking an exchange And then finally we have reits which Stands for real estate investment trust This is a company that owns operates or Finances income producing real estate So they historically have access to an Unaccessible asset class So meaning that You know unless you’re a high net worth Family or high net worth individual You’re not out here buying office Buildings and strip plazas and strip Centers and all that stuff you know Those are typically reserved for people With a higher income The other pro is that reits are traded Just like stocks that’s why they’re in This presentation They’re liquid meaning that we talked About liquidity they’re very easily Tradable You can buy them sell them very quickly Uh they have stable cash flow through Dividends that’s what they provide the Reason for this is because legally reits Have to pay out ninety percent of their Income okay um that’s literally the law So they typically pay out very high Dividends historically real estate is a Very sound asset class and Historically real estate has produced

Some of the highest wealth in human History however some of the cons of Buying and selling reits are that the Dividends are taxed as regular income Which we’ll talk about at the end of the Presentation uh they’re subject to Market risk so if you remember the Economy turning down in 2008 after the Great financial crisis a lot of real Estate lost you know 30 40 sixty percent Of its value you know within the span of Six to twelve months And sometimes these reits can have high Management fees that they charge Okay so now here’s where some more Rubber meets the road in terms of how to Evaluate a company so we’re gonna be Looking at financial statements uh so i Come from a traditional finance Background i have a finance degree i Used to do this for a living This is important because a lot of People when they’re investing in stocks They just go for kind of like the uh you Know what stocks are sexy and you know What’s cool but they never look at the Numbers they truly don’t even know what They’re buying they just go by the name And what the company’s doing and it’s a Very uh Sophomoric or rudimentary way to invest Okay So financial ratios where these numbers Come from so they come from essentially

Three things the balance sheet the Income statement and the cash flow Statement so what do these mean so the Balance sheet is typically your assets Equaling liabilities plus shareholders Equity so what are the things that the Company owns that have value uh they Should be equal to the liabilities this Could be accounts payable for example Plus shareholders equity we’ll break This down further later in the video So income statement this is the revenues And the expenses during a specific Period okay so you have your net income Totaling your total revenue plus gains Minus your total expenses plus losses That’s your net income so it’s basically Money in money out how much did i make After all the money i spent this year Number three is cash flow statement so This is your cash inflows versus your Cash outflows this is no different than A diet you have your calories coming in You have your calories going out your Calories being burned so this comes from Three things you have cash flow your Operations this is your business Activity things like that you have Investment cash flow this is your pp e Property plant and equipment uh capex Which is capital expenditures and then Finally you have financing so this is The cash flow between a business and its Creditors which can be seen in a 10k so

There are five financial ratios when Buying stocks that you should be looking At you have valuation ratios you have Profitability ratios you have liquidity Ratios you have debt ratios which shows Solvency meaning is a company solvent Meaning are they able to service their Debt aka can they pay back what they Borrow And then five you have efficiency ratios So we’ll be going over that right now So the most common ratio um which There’s going to be some asterisks or Asterisks is In this presentation Uh this one is the price to earnings Ratio okay this is considered a Valuation ratio so a p e ratio is simply A company’s share price to its earnings Per share so this is relative value of a Company’s shares apples to apples so if You remember how we talked about how Mutual funds are hard to make apples to Apples comparison on that’s because They’re very different they invest in Different things they have different Objectives but when you look at two Companies you can get an exact idea of The company’s relative value of their Shares Versus their earnings per share if that Makes sense so the formula is market Value per share divided by earnings per Share so let’s give you a live example

Right now okay my friends on the screen Right now we have finviz finviz.com i Highly highly highly recommend you learn This site because this is a great way to Get you all the financial visual Information that you need to be a Successful investor There’s a lot more that the site offers But right now we’ll just be using apple As an example okay So right now we have apple we’re looking At their chart right here which i can Explain later but remember right now We’re just trying to figure out the p e Ratio okay So right now we can see the answer to This question is that apple’s p e ratio Is 27.44 Okay so how do we come up with that this Is market value per share divided by Earnings per share so if we look at um Some of these things are going to be a Little bit outdated because right now uh The market i think it just closed at the Time of this recording So these numbers may not be updated but If we just do simple math right here We’re going to take the market value per Share so we know that apple right now is Trading at 165 dollars and 29 cents Okay so we’re going to take 165 dollars 29 cents

And we’re going to multiply that or Excuse me we’re going to divide that by The earnings per share 6.02 Divided by 6.02 That gives us 27.45 so if we go back to finviz We can see here our p e ratio we are Correct 27.44 okay and these numbers gonna be Off just a little bit but you get the Idea So if we go back to this A healthy p e ratio should sit at 15 or Lower and the reason there’s an asterisk Right here ladies and gentlemen is Because There’s a lot of things that go into the Economy and into stocks that have Affected um Share prices over the past i’d say 12 to 15 years or so and that is there’s Been a lot of money printing okay a ton Of money printing a ton of cheap debt That is outside the scope of this video But you need to take all of this with a Grain of salt so traditionally if you’re Warren buffett they typically look for Companies that were value companies so p E ratios of 15 or lower that’s what was Considered Healthy you know back in the day now no Serious investment or investor you know Holds p e ratio with two too much grain

Of salt but it’s important that you Understand how to calculate it and Understand it so don’t don’t regard this Healthy number just as much It used to be as well more relevant but Now it’s not so moving forward So price to earnings to growth ratio Okay This is what we call a peg ratio this is A valuation ratio so the peg ratio is a Company’s share price to its earnings Per share growth so this is basically Making an apples to apples comparison of A company’s stock value factoring the Amount of growth they have so this Formula is a price divided by earnings Per share divided by earnings per share Growth earnings per share growth is Simply just an estimate so we’ll give You a live example of that right now Okay so we’re back on apple on finviz so The nice thing about finvis to be honest With you is that they already give you All these answers so we already know That the peg ratio is 2.67 and since It’s colored red we know that it’s Somewhat unhealthy You can see here that they already make Things in green black is neutral red is Aka bad kind of so The whole point of this video is for me To teach you how to do this anyone can Just look up the answer but that doesn’t Mean that you understand what you’re

Doing so if we take the peg ratio Remember the peg ratio is simply just Price divided by earnings per share aka The pe ratio we already did this so this Was the answer from the previous Slide for the p e ratio and we simply Divide this by the earnings per share Growth so since You want to use an estimate a long-term Estimate which is typically the next Five years we can see here that their Earnings per share for the next five Years is projected to be 10.28 percent So the formula is just price divided by Earnings per share that’s this number Right here Divided by 10.28 the percentage what do we get 2.67 Oh look at that peg ratio 2.67 We’re right so that’s how you figure out The peg ratio guys so let’s go back into The presentation we’ll look at our next Ratio it’s important for you guys to Understand this i know this is kind of Boring for some people but it’s Important to understand these ratios Next we have price to book ratio this is Another valuation ratio so a pb ratio is A company’s market cap to its book value This compares the cost of a stock to the Value of its equity if the company was Sold today so this is the stock to Assets value so the formula for this is

Simply the market price per share Divided by book value per share book Value broken down is your total assets Minus your total liabilities divided by Shares outstanding we talked about Apple’s shares outstanding earlier in This video so let’s give you a quick Live example so if i go back to finviz We can already see that the answer is Right here 37.65 that’s the price to book ratio However um you know we need to figure Out how this works we need to actually Be practitioners and understand these Calculations so i’m going to take the Market price per share which we already Know Is 165.29 so i’m going to go to my Calculator Apple’s price per share 165.29 And what we’re going to do is divide That by book value per share so if we go Back to finviz you can see here That the book value per share Is 4.39 So if i go back to the calculator Divided by 4.39 Voila 37.65 what was the answer according to Finviz Price to book ratio 37.65 See how easy that is so a lot of these

Ratios are going to be uh common sense Or not common sense but it’s gonna be Basic math however it’s important that You understand what you’re doing and why You’re doing it so take take a moment During this presentation if you download It again you can download this in the Description below You need to be able to download this Stuff and understand and calculate these Metrics yourself So if you look at a healthy pb ratio Again there’s an asterisk right there Because You know who knows what’s really Considered healthy in these days it’s Typically three or lower and if you go Back to finviz uh you can see here that They’re sitting at 37.65 which is why it’s red But again apple’s a you know tech Company they pay a good you know decent Dividend they’ve been around for a while There could be reasons for these Valuations being a little bit out of Whack okay so the next metric on how to Evaluate a company with a financial Ratio comes down to roa roa is simply Your return on assets this is considered A profitability ratio so roa simply Tells you as an investor how profitable A company is compared to its assets so This gives an investor an idea as to how Efficient a company’s management is at

Using its assets in order to generate Earnings so this formula is very simple So if you just go down to the next Bullet point you can see here that it’s Net income divided by total assets So we’ll give you a live example right Now so if we go back to finvis you can See that the answer already is going to Be right here as with most of these Ratios is in finviz but again we’re Practitioners and we want to know how to Come up with this number ourselves so The answer that we’re looking for is 28.7 percent or somewhere close to it so If we go to finvez you can see here that If we look for net income you can easily Find that right here it’s just called Income and they’re sitting at 100.56 Billion dollars in net income but if we Didn’t have this we would actually Scroll down and you can see here that Finvis actually provides you with Income statements balance sheets and Cash flows of these companies which is Pretty cool this is very powerful stuff You guys so if we didn’t have the answer For income up above which i just showed You we would come to one of these three Statements so if you had to guess where Is net income going to be on these Statements is it going to be on the Income statement the balance sheet or The cash flow statement obviously it’s Going to be at the income statement

Because we’re looking for net income so If we scroll down you can see right here We have net income right there and we’re Going to have three different time Periods what you want to use is the last 12 months you want to use trailing 12 Months so you can see here that they Have september 26 2020 september 25th 2021 and then right here we have ttm That stands for trailing 12 months this Is the metric that you want to use so if We go down to net income we can confirm That we are looking at 1.56 billion right here it’s not 100 5 100 555 you have to add on zeros that Make it a billion they’re just doing This to shorten the number here so we Confirm that so now we need to figure Out what total assets are so what do we Discuss where we talked about where it’s Kind of like a snapshot of the company Well the snapshot comes from the balance Sheet this shows you at any given point In time You can see exactly what the company has In terms of you know cash inventory Assets things like that accounts payable Receivable liabilities but what we’re Looking for is remember total assets so We see that number right here i’m going To use the most recent column Which is coming back at 351 000.002 So let’s take these two numbers and put Them into a calculator so we’re going to

Do this we’re going to take I believe it was 100.56 billion Uh remember that’s our net income Divided by total assets of we’ll do 351.002 okay 351.002 Which gives us this number right here 0.2865 Now if we multiply this remember this is A fraction we need to multiply this by a Hundred to get our percentage or a Number You’re going to get 28.64 Okay so if you go back up to Roa percentage 28.7 is the answer here so we’re close Enough remember this these these prices And numbers change all the time on Finvis we’re not going to be 100 Accurate But you can see here 28.65 28.7 same thing that’s how we figure out Roa makes sense so now let’s go back to The presentation we’re going to look at A couple more valuations i know again i Mentioned this could be kind of boring To you but again this is paramount that You understand this stuff before just Clicking buttons and starting to buy Stocks left and right without even Knowing what you’re doing right So the next slide is going to be roe This is return on equity this is again a

Profitability ratio Roe measures uh how efficient a company Is at generating profits so this gives An investor an idea as to the Profitability of a company in relation To the stockholders equity so this Formula is very simple as well this is Simply net income divided by Shareholders equity and we’ll give you a Live example right now using finviz okay So this one’s going to be a little bit Tricky and i’ll show you why remember we Have to line up the time periods to get The right numbers so roe right away we Can see the answer here Is about 150 percent okay 149.8 percent So according to the last slide we would Have to go and either look at this which We have Uh net income remember we’re looking at Net income divided by shareholders Equity so your first inkling or your First instinct is to go back to using 100.56 billion but i’ll show you why This one’s a little bit different okay And this we have to pay attention if You’re being a good analyst so remember We have to use the same time frames uh For the same ratios so if we go to the Balance sheet we are looking for Shareholders equity so if you look at Total equity you can see here that for This column it is uh 63.09 Billion okay so if we scroll back up you

Can see that this time frame right here Is september 25th 2021. now if we go Back to the income statement you can see That the net income here is trailing 12 Months okay So for this one we’re actually going to Use uh this net income right here which Is 925 2021 and i know it’s a little bit Confusing because i did use trailing 12 Months for the previous ratio this is Just one of those things that you have To have experience with or massage to Understand why this is going to be right And i’ll show you why it’s right so We’re going to actually take this number Right here we’re going to take the net Income of 94.68 Okay which you can see right here so i’m Going to put that in the calculator 94.68 that’s our net income divided by Shareholders equity so if we go back to The balance sheet you can see here that The total equity for this time period is 63.09 Okay so if we go back to the calculator 63.09 We should get 150. there we go we have 1.5 times 100 150 percent So if we go back to finviz we can see Here sorry for all the scrolling and Stuff i’m just trying to get back up Here pretty quick That the roe is indeed 149.8

So we’re close enough remember finviz The prices and things do change uh Sometimes it’s not 100 up to date but This is close enough um so we’re Basically right with this roe so if we Go back to the presentation The formula for return on equity is Simply just to uh is simply net income Divided by shareholders equity and this Just gives an investor an idea as to the Profitability of a company in relation To their equity so a healthy roe for This one again we have an asterisk it’s Just subjective to the industry that They’re in so tech is going to be Different than consumer goods for Example okay so the next financial ratio Is the current ratio this is a liquidity Ratio this basically shows you The ability of a company to be able to Pay its short-term obligations or those Due within one year so this gives an Investor an idea of how a company can Maximize the current assets on its Balance sheet to satisfy debt or Payables so this formula again is very Simple it’s just current assets divided By current liabilities and we’re looking For a healthy current ratio of at least 1.2 to 2. Again this there’s a little asterisk Right there which you get the picture Already so let’s go into finviz and try And figure out apple’s current assets

Divided by their current liabilities so We can see in finviz the current ratio Is coming in at 1.0 so that’s why it’s Black it’s not super unhealthy but it’s Not Measuring up to our 1.2 to 2 and let’s See how we can figure this out so again We’re looking for current assets divided By current liabilities so which one of These statements right here out of these Three remember we’re looking at income Statement balance sheet and cash flow Which one do we say is a snapshot in Time of the company’s uh current Balances Obviously answer is going to be balance Sheet right so if we look at Uh we’re looking for total current Assets so if we use 925 21 as the column That we’re looking at we can see here That they have 134.836 billion so we’re going to put in 134.836 134.836 Divided by current liabilities so Remember assets liabilities Right here we have total current Liabilities we’re coming coming in at 125.481 So 125.481 And we’re actually coming in at 1.07 Which we can see right here which is Going to be a little bit higher than What finviz is telling us so finvis is

Telling us 1.0 so again there may be some small Discrepancy in the data but for the most Part as long as you’re doing the Calculations correctly you are getting The right answer so 1.07 is actually the Correct answer so let’s go back to the Presentation again we were shooting for A healthy current ratio of 1.2 to 2 But again apple has a ton of cash uh They are a healthy company it just this Depends on industry So if we move forward we’re going to do The quick ratio as well this is very Simple this is also a liquidity ratio This measures the company’s capacity to Pay its current liabilities without Needing to sell inventory or get more Financing this is considered more Conservative than the current ratio Which we just solved for so this one is Going to be your cash plus marketable Securities plus accounts receivable Divided by current liabilities so a Healthy ratio or a healthy quick ratio For this one is one to one which when we Saw finviz We already know that One is considered healthy right here for A quick ratio so let’s dive in and do The math on this one and figure it out Okay so you know the drill we’re going Down to fin viz we’re going back down to The balance sheet because it’s a

Snapshot we’re seeing the cash the Marketable securities and the accounts Receivable remember the formula for the Quick ratio is cash so we’re going to do Cash and equivalence Marketable securities that’s short-term Investments cash and short-term Investments right here uh and then we Have accounts receivable net okay So let’s um let’s take a look at this And we’ll actually add all this up this May be a little bit of pain in the box We have to go back and forward but let’s Do it so we’re going to take 17.635 Okay 17.635 Plus That’s just this number right here Short-term investments 27.699 27.699 Plus Cash and short-term investments 62.639 62.639 Plus we’re gonna do accounts receivable Okay accounts receivable is 26.278 26.27 That gives us a total of 134 billion 251 Million let’s just do 134.251 for easy numbers and remember We’re going to divide this by our Current liabilities okay that’s what We’re trying to solve for so if we go to Current liabilities we already figured This out it’s 125.481

125.481 Equals 107. okay so we’re a little bit High again Because remember finvis is saying That it’s supposed to be one to one um But we’re close enough so again these Numbers may be you know slightly off They may be looking at you know another Column that i may not be accounting for But trust me we’re close enough and this Is the right way to do it again it’s Cash Short term investments that’s considered Marketable securities cash and Short-term investments accounts Receivable okay okay so the next ratio Is the debt to equity ratio aka the debt To solvency ratio no one really calls it That it’s mostly the debt to equity Ratio so this is simply going to be a Measure of a company’s financial Leverage so this is showing a measure of The degree that a company is financing Its operations through debt versus Wholly owned funds so this is no Different than to give you a real estate Example let’s say a property is a Hundred grand an investor wants to put Down twenty thousand dollars of their Own cash they’re getting an eighty uh Thousand dollar mortgage on a property That’s worth one hundred thousand Dollars their debt to equity would be

Eighty divided by a hundred okay so That’s their debt to equity so we’re Going to show you um the formula for This it’s going to be the total Liabilities divided by the total Shareholders equity And the example is going to be on the Next slide and remember a healthy debt To equity ratio is typically one to one Again with the asterisks so if you look At the debt to equity ratio you’re going To look at total liabilities divided by Total shareholder equity This is what you owe versus what the Shareholders own so if we took a Company one which has a five debt to Equity ratio you can see that they have A hundred thousand dollars in business Loans divided by twenty thousand dollars In retained earnings so if you have a Five debt to equity ratio remember we Said ideally one to one is healthy This is going to be a highly leveraged And risky investment now if we look at Company 2 with a 0.5 debt to equity Ratio you can see that they have 50 000 In outstanding business loans divided by A hundred thousand dollars in retained Earnings so this would be considered a Low-risk company and quote-unquote a Better investment so whatever i mean you Can’t just call it a better investment Because this company right here company One may be a you know startup company

They took on a lot of debt but they’re Going to be the next unicorn and 10x or 100x As to where company 2 may be kind of Like a dividend or an income stock like A 3m for example that is low risk you Know it may be a better blue chip Company but it may have much smaller Upside um as well as much lower downside Or higher downside whichever way you Want to phrase that you may not lose all Your money as opposed to investing in Like a highly leveraged company for Example So that’s all you know the verbage you Want to use So Sorry we do have a couple more ratios we Do have the asset turnover ratio this is An efficiency ratio so asset turnover Ratio this shows you the measure of a Company’s ability to use its asset to Generate sales or revenue so this shows You the degree at which a company is Financing its operations through debt Versus wholly owned funds so the formula For this is uh total sales divided by Beginning assets plus ending assets Divided by two So again we’re going to show you an Example on the next slide here so Healthy asset turnover is considered you Know a higher number is more preferable But again it’s all company specific

Industry specific So we can see here we have four Companies we have walmart target att and Verizon We’re going to see their beginning Assets right here and the y-axis you’re Going to see the ending assets right Here in this column average total assets Revenue and asset turnover ratio so We’re going to see walmart who has 199 581 In millions so you have to add six zeros To this number but let’s just call it 199 000 for easy numbers uh in beginning Assets then they have 198 and ending Assets with an average total number of Assets of 199 199 203 With revenue of almost half a million Dollars their asset turnover ratio is 2.3 Now target these numbers are going to be A lot lower okay so you have forty Thousand uh 262 in beginning assets 37 431 and ending average total assets is Going to be 38 846. the revenue is going To be close to 70 000. the asset Turnover ratio is going to be 1.79 you Have the att’s of the world where they Have you know a ton of assets you know Decent amount of revenue same thing with Verizon and these ratios are going to be Much much lower so remember the higher Number is more preferable

This is just measuring the company’s Ability to use its assets to generate Sales over revenue this shows me that Walmart and target are generating much Higher sales compared to its revenue Than att and verizon are okay So this is going to be beyond the Numbers so i’ve talked a lot about the Numbers let’s go something that’s beyond The numbers now so what the statistics Don’t tell you so you’ve boiled down Your search to a few companies based on Numbers the ones that you’ve learned in This presentation you’ve eliminated a Lot of the bad apples um you know you Eliminated all the Speculative companies all the penny Stocks all the tick tock recommendations Out there And you’re actually you know picking a Few companies that have narrowed down to The criteria that you’re looking for So stats rarely tell the whole story if You guys are a little bit older you may Remember enron worldcom More recently uh lucan Coffee the chinese company These were companies that were actually Literally found out to be frauds okay So you need to understand that Statistics are one thing but you know Books can be cooked although it rarely Happens with publicly traded companies But it does happen

But you need to understand how to Analyze a company beyond the numbers so Here’s uh five quick steps so you have You have to keep up with the news about Stocks you own okay so you have to Understand what competitors are doing so For example if you’re investing in tesla Well it would behoove you to understand What rivien is doing what other electric Companies are doing electric vehicle Companies are doing what is ford doing How are the big Legacy manufacturers innovating in the Ev space right so you can’t just be Super confident that tesla’s always Going to be number one in the ev Category so you need to keep up with the News about stocks you own about Competitors and then also internally What’s going on inside the company Number two is media outlets have their Own agendas so if you look like For example um you have to take Everything they say with a grain of salt May actually be pumping ipos same thing With like different stuff you never know What the what the own agendas are of These people you need to do your own due Diligence i’m not saying that i’m just Using them as an example but you know You need to do your own due diligence so Number three is never invest based on Hot stock tips so do your own diligence On this as well

You know just because you’re at the Locker room at the rec center and Someone’s saying oh stock xyz is going To go to the moon You know don’t just smash by don’t just Jump on robin hood or mumu and you know Smash buy these stocks you need to Actually do your own due diligence That’s the whole point of this video Number four is tracking and maintaining Your own portfolio You need to trust your own process and Your own thesis So if you’re buying 10 different Individual companies you need to Inherently understand that four or five Of these are going to be most likely Duds You know a few more are going to barely Keep up with an index fund or an etf you Know one may outperform and then the Other may be a unicorn you know that 100 X’s for example so you need to track and Maintain your own portfolio at all times And then finally you know number five Don’t overreact to the news There’s always going to be times of war Especially at the time of this recording Right now there is There’s going to be times of insolvency If you remember the greek debt crisis The cyprus bail-ins 2008-2000.com bubble there’s going to be Periods of insolvency as well you just

Need to stay the course and remember Number four you know trust your process And your own thesis So now is the time of the presentation That you guys have all been waiting for The trading app that we’ll be using in This video is moomoo which is a Commission free mobile trading app Available on apple android and windows Devices the reason i’m using moomoo is That it is a great alternative to other Brokerages such as robinhood and weibull Is a commission free trading platform For u.s stocks that allows you to buy Stocks options and etfs at a low cost so Moomoo offers impressive trading tools For both beginner and advanced investors Some of the features include advanced Charting pre and post market trading International trading research and Analysis tools and most popular of all Free level 2 us market data which we’ll Get into later in this video so if you Aren’t familiar with moomoo it’s an Online trading platform offered by Moomoo inc which is based in silicon Valley california is an indirect wholly Owned subsidiary of future holdings Which is a nasdaq listed company so Securities products and services on mumu Are offered through futu inc an sec Registered broker dealer and a member of Finra sipc i like moomoo because it’s a Platform that you can start using as a

Beginner and grow into over the years as You become more and more experienced as An investor we can place simple buy and Sell orders but also start using more And more of mumu’s advanced research and Trading features down the road you can Also use moomoo on many different Platforms because they offer both pc and Mobile applications if you want to use Moomoo on your desktop and link it to as Many as 10 hd monitors simultaneously You can do that if you want to place a Trade or use the platform on a mobile Device such as your phone you can do That too mumu offers advanced charting Smart orders longer trading hours Outside of the traditional 9 30 a.m to Nine p 4 p.m eastern standard time Trading hours and multi-market quotes For both the united states hong kong and China markets one of the coolest Features of moomoo for new traders is That they have an in-app active Community of over a hundred thousand Users who can comment and interact with Each other this allows beginners to Learn casual investors to engage and Active traders to share their investing Ideas whether you are a new or Experienced investor watching this video Moomoo is a platform that you can grow With over time they are currently Offering one or more free stocks to Those who open an account and make a

Deposit so be sure to use the link in The description below when signing up Okay so without further ado we’re Actually going to jump into the moomoo Desktop platform uh i think a lot of you Are going to be using the mobile Application so you’re going to be using It probably on your cell phone but for Those of you that want to actually use The desktop application i will be using That for this demo right now The reason for that is because it’s Going to be a little bit easier to see These things as opposed to recording my Cell phone screen And the concept is the same it’s going To be the same exact application just This one’s for the desktop and for Monitors the other ones for your cell Phone so if you look at where my cursor Is along the left-hand side of the Screen here we have different tabs okay And i’ll walk you through each one of These tabs very quickly So you have account so this will show You the different accounts that you have You can see right here where my cursor Is i have about twenty one hundred Dollars sitting in moomoo Right now it’ll show you your profit and Loss your positions your market value Buying power all that stuff so this is Considered a margin account so i can Uh trade more than twenty one hundred

Dollars i can actually trade forty two Hundred dollars uh but that’s outside The scope of this video so if i go to Watch list you can see here you can mark Different equities or different stocks Uh to be watched and traded so say for Example i wanted to keep an eye on apple Or tesla or netflix for example i can Quickly and easily see that within the Watchlist tab okay You can check out your positions my only Position right here is because i got a Free stock which is serious um you know I can click into that look at the chart Right here so on and so forth Next is you have markets this is pretty Powerful so if you look at where my Cursor is you have watch list so this is The just the stocks that i have that i’m Watching but you can also click into Broader markets such as the united States for example and below that you Have us hotspot so this will show you Some stocks that are actually Going up a ton in roi right now or in Share price But what you have here is that it tracks Market indices or indexes if you will This is the dow jones industrial average We talked about that earlier in the Video we have the nasdaq which we talked About earlier in the video we have best Performing then we have hot stocks Pre-market after hours ipos which stand

For initial public offerings and then You can actually click into different Exchanges so here we have the hong kong Exchange There’s china there’s there’s there’s a Bunch of different ones you have options You have futures So these are options tradings uh options Chains which are outside the scope of This video You have futures you have different Indices right here all over the world Forex which is foreign exchange so you Have currency pairs such as uh united States dollar and the japanese yen which Is outside the scope of this video you Have crypto uh bitcoin ethereum uh usdt Tether all that stuff so there’s there’s So much so much so much so much Information uh in this and it would take Forever to go through this so i’m just Gonna show you the a couple more Different tabs here uh we have strategy So you can actually use quote data to Construct a number of short period Factors This is going to create you know Hypothetical situations that you can Trade We have different portfolios so you can Look at different people’s portfolios so These are actually different users uh Within the platform and you can see you Know what their total return is

You can see what they’re trading over Here in the bottom right so you can get Ideas from different users within the Community Based on their ranking if you will so There’s daily monthly Total there’s fans people that have the Most followers But if you look at monthly you can see This person right here Their portfolio is up 108 percent uh Which is basically doubling their money And you can see kind of how they got There so this is pretty interesting There’s data there’s trades which we’ll Be talking about we’ll show you how to Actually buy And sell a stock And then you have news which is very Powerful it’s all up to date and then You have streaming and then paper Trading so if you want to trade just With fake money to get started you click On paper um you choose you know what you Want and then you can actually just Trade you know with fake money or paper Money just to see how you would do So if i go to my watch list let’s use Apple because we’ve been using apple uh This entire time Uh so there’s different there’s Different um things that you can click On so there’s uh research there’s notes There’s um you know major events there’s

Options there’s trends there’s all this Stuff down here if you want to learn More but for the sake of this video i’m Just going to show you the demo very Quickly and how to buy and sell a stock So just to understand just so you Understand what’s going on right now i Know it’s kind of hard to see i Apologize but this is apple’s ticker Ticker symbol aapl remember we have a Ticker symbol and apple trades on uh the Nasdaq that’s the exchange that we Talked about So this is the current price per share That’s going on right now so it’s Trading at 166 dollars and 31 cents and This is gonna move up and down so it’s Gonna be hard for me to actually Pinpoint an exact price when i’m Explaining this to you uh but just keep In mind it’s trading at roughly 166 Dollars per share So now if i click on trade this yellow Button right here that’s going to open Up this trading window right here okay This is how you’re going to buy or sell This stock so i know this looks Intimidating but i’m going to walk you Through exactly you know what to do So this is the account that i’m using The u.s margin account you so you know Where your money is coming from okay So make sure that you know wherever you Have your funds you know in this case

It’s going to be a u.s margin account That’s where you want to be trading that Account with or that stock width so We’re going to have a type this one is Going to so we have different types of Trades here so we’re going to have limit Market stop limit stock market limit if Touch market if touch trailing stop Limit trailing stock market price so This you’re probably like sitting here Not understanding anything i’m saying All you need to understand as a beginner Is you need to be trading at limit okay So the reason for that is this So say for example we know that apple Right now is trading at 166 dollars and 35 cents okay actually i’ll pull this Back up it may be easier for you to see This So we know they’re trading at 166 Dollars based on the price right here And the price right here i know this may Be kind of hard to see Um so if i want to go place a trade say I wanted to buy A limit order of apple that’s the ticker Symbol we’re on aapl And we have the price right here that we Can set so say i’m only going to buy Apple when it reaches 166 dollars okay that’s it so i put in My price right here and i put in the Quantity how many shares i want to buy Okay so say i want to buy one share it’s

Going to be 166 So you can see here that i can put in One share of apple that’s what i want to Buy this is actually telling me um You know i’m able to buy up to 12 based On the money i have in my account so if I click that 12 it’s just going to max Out the amount of shares that you can Buy i’m just for the sake of this Example i’m only going to buy one share Of apple okay So now that i’ve put this in a limit Trade Will only be filled When this price gets to 166 or lower It’s going to be filled at 166 okay So the reason for that is because if i Did a market trade right here That’s going to fill at whatever the Market price is so remember stocks go up And down because of buyers and sellers And what people think the stock is worth Okay so there’s a bid price and an ask Price so the bid price is what people Are trying to sell it at the ask price Is what people are trying to buy it at And right now you can see the price per Share is at 166 dollars and 38 cents so If i went to buy this stock right now it Would cost me I would buy it at market so that can go Up it can go down it’s most likely going To close somewhere right around this 166 Dollars and 40 cents you don’t want to

Do that because you’re not going into The trade with the entry that you want Or that you know you’re going to get They can vary you know by a few cents by A few dollars you know just depends on What the market price is once this Closes most of the time it’s just going To close on what you see on the screen So if i traded this right now i’d most Likely end up buying this at 166 dollars And 40 something cents okay so we’re Going to stick with a limit trade so if I stick with the limit trade you put in Your price you put in your ticker symbol And say i want to own And apple at Dollars and zero zero cents okay so i’m Going to click here and go to unlock Trade it’s then going to ask me for my Password So it knows that this is a legitimate Trade it’s just another layer of Security so it knows that it’s marco in This in this instance buying this stock So let me put in the password right now Okay so i just unlocked that so now i Can buy so i click buy and what this is Telling me is that it’s coming the Money’s coming from this account it’s a Limit order i’m buying Apple aapl ticker symbol aapl at the Price of 166 dollars i’m buying one Share for a total value of 166. the time And force is day okay so that means that

This will only be good for the day okay So uh say trading time closes at 4 p.m Um Eastern standard time That’s this trade will be gone after That if it doesn’t fill by 4 pm okay so If we go to confirm We get a little notification okay so now If i click on the uh trade column or the Trade tab over here on the left-hand Side of the screen you can see all of Your pending orders right now okay so if You see this highlighted tab right here That says orders so trade status There’s one trade pending obviously the One that i just put in which was a limit Buy of one share of apple So right now Uh it’s kind of sitting there uh pending And it shows you when you initiated that Trade so in this case it’s april 19th uh 1 38 pm um at the time of this recording It’s a limit order uh it’s going to be Time in force it’s a day trade And then basically if this closes if it Goes be below 166 or less This trade will close it’ll show you Your average filled price so if i had if I was buying multiple shares These may be filled at like 166 165.99 165.98 for example they may not all fill Exactly at 166 but since i’m buying one Share this will most likely fill at 166. So um so this is not really buying the

Share because i didn’t buy it just yet So what i’m going to do for the sake of This video is i’m going to actually make A market order Um of apple and we’re going to go at the Current market price i’m going to buy One share and right now it’s sitting at 166.37 So in order to buy a share immediately i Would put in a market order which i Don’t recommend new people doing unless You really want to I’m going to click buy and it says it Even prompts you and says you are using A market order please note that there’s There’s no guarantee and the transaction Price of the order it may be executed at Any price okay so most likely it’s going To be filled um at that price and it is So you see right here After you hear the little ding i now own One share of apple so i filled this at The market price i bought apple right Here Uh the order price was the market price I ordered one share and one share at 166 Dollars and 31.5 cents that’s what it was or finish That or fill that excuse me so that took Place right here three minutes after our Other limit trade Because that still hasn’t hit 166 or Lower this trade may never fill say Apple never goes below 166 again this

May just sit out there until it’s you Know canceled or it sits out there Forever depending on how i want to set It up so i now own uh one share of apple So if you look at my positions up here You can now see that i own one share of Siri one share at 636 okay i have one Available share of siri to sell if i Wanted to i have one share of apple to Sell if i wanted to you can see the Percent change since i’ve actually Inherited siri from getting a bonus on Moomoo it’s actually down 7.29 percent Um and then you can see how much of your You know positions it is etcetera Etcetera so that’s all you need to know If you want to buy a stock now how do we Sell a stock so you would go to the Stocks that you own you can sell Actually you can actually sell stocks That you don’t own But that’s definitely outside the scope Of this video for beginners so say i Wanted to sell this share of apple that I just bought So you can do a couple different things Again you can do a market order so say For example this was two weeks later and Apple is sitting at you know hundred Seventy dollars okay so i can do a Market uh Of type or my our market sell if you Will and whatever apple is trading at is That that is what it’s gonna sell at so

If it’s 170 and i want to sell my one Share of apple at 170 that’s most likely What it’s going to fill at okay now if You’re smart you want to do a limit Order okay and the reason for this is Because you know exactly how much money You’re going to be getting for your sale Okay So uh for example uh apple right now is Trading at 166.27 166.27 obviously that’s fluctuating as i Speak But if i wanted to set up a limit sell i Can put in my price right here Limit price market price whatever i Wanted to do let’s just say i wanted to Sell this at 167 dollars a share so you can see here Exactly how much you’d be getting you’d Be getting 167 Okay so now if i want to uh sell it i Can set this up and now i have a pending Uh sale okay so remember i have a Pending buy that still didn’t execute Because it didn’t go down to 166. now i Have a pending sale that didn’t execute Because the stock price is not 167. it’s Still sitting at 166.29 So this is going to fill Whenever it reaches 167 dollars okay Makes sense So now say for example you know i need i Need money right now say uh god forbid Something happened and i need to sell

These stocks right Excuse me Right now right this second so i’m gonna Go to number two i’m gonna do a market Order and i can sell it at this right Here so if i click sell i’m gonna be Able to sell my one share of apple at 166.26 so if i click that it’s going to Tell me you still have a pending order Of the stock in the opposite direction So i have to cancel the opposite Direction order and try again so what I’m going to do is i’m going to cancel This right now so i have the buy order Right here i’m going to click cancel Don’t remind me again got it boom so now This this order that we had at 166 is Now canceled Okay so this is most likely not going to Go through because remember i have a Pending sell order at 167. so i can’t Sell two shares of apple that when i Only own one so i’m gonna have to cancel This order as well so i canceled that Limit order or limit sale excuse me and I’m gonna go here mark it and sell this And then boom this was filled okay so You can see that this filled right now i Sold this at market price uh one share At 166.245 cents okay so remember if i go Down here you can actually see you know Your trades for the day or the histories If you will

You can see that i bought one share of Apple at 166.315 And i sold it just for the sake of this Video as a quick example at 166.245 and you can see here that Today’s profit and loss is negative Seven cents okay that’s the difference Between these two numbers So um there’s a lot more to unlock Within moomoo but this was just a very Simple way of showing you how to buy and Sell stocks on it i know this looks Intimidating i know it looks crazy if You haven’t been doing this for a long Time i’ve been investing for 16 years so i understand what this lingo Means But if you want to take a tutorial or Look at other tutorials there’s Definitely tutorials out there as to What types of orders and things these Are if you’re not comfortable with mumu There’s definitely other brokerages out There But i decided to use this as the Broker in this example just because it Has a ton of features that you can Really grow with Okay so let’s talk about taxes and fees Now that we’ve actually bought and sold Our first stock so a lot of this is Pretty simple depending on what types of Shares you own sometimes you can have Like reits that are taxed differently

Sometimes you have dividend stocks that Are taxed differently Sometimes you have covered call etfs That are taxed differently If you remember when we talked about Etfs and index funds earlier in this Video but for the most part this is what You need to understand as a beginner Okay so to incur a capital gain this is Basically selling uh a stock for more Than what you bought it for okay so you Made a gain so say you bought a um you Bought for a hundred dollars and you Sold it for 110 this would be a capital Gain of what Obviously ten dollars you made ten Dollars a capital loss works the same Way this is you sold it for less than What you bought it for so if you bought A stock for a hundred ten dollars a Share and you sold it for a hundred Dollars a share you have a capital loss Overall of ten dollars assuming you just Have one share so what you guys need to Know is Um The the durations so a short-term Capital gain or loss is less than a One-year holding period this is Considered a regular taxable income so Say for example you bought a stock on April 1st 2022 and you sold it on may 1st 2022 This would be a short-term capital gain

Or capital loss Because you held on to the security for Less than one year this is taxed at your Regular taxable income level so whatever That percentage may be that’s what You’re going to get taxed at now the the Irs they want to incentivize it that you Want to hold these stocks or equities Longer okay so they incentivize it by Taxing you somewhat less on this so You’re going to have a long-term capital Gain or loss this is when you’ve hold an Equity or held in equity longer than one Year so say for example you bought that Same stock on april 1st 2022 and you Sold it may 1st 2023 this is obviously 13 months later this is longer than a One year hold so depending on your Filing status and income you’re either Going to be taxed at 0 15 or 25 percent This is much lower and this is why the Government wants you to incentivize you To hold these stocks longer than shorter And they also punish day traders with This as well but that’s beyond the scope Of this video So again i just wanted to cover the free Gifts and added value of this video Please download this presentation There’s a link in the video description Below it’s absolutely free We’re offering free stocks if you use The link below to moomoo this is the Platform that we just used in this video

You can click on either of those links And you’ll get a free stock from moomoo By signing up and also by depositing Some money So again check the description below for That and then as always be on the Lookout for whiteboard finance University join the waiting list with That link again we’re going to have Courses live q a with me most likely Once a week in a live stream and then We’re also going to have the community Discord so with all that being said this Video was a mouthful i know some parts Were boring some parts were exciting But again i’m offering this to you Because it’s generational wealth you Have the opportunity to build Generational wealth and stocks are more Intimidating than they seem i hope this Video simplified it for you as always i Have your best intentions in hand Again Do due diligence trust the process Use the things that we learned in this Video don’t just blindly click on Buttons and buy stocks just because Someone said it was a hot stock tip you Need to understand what you’re doing When you buy it and why you’re buying When you buy it okay So i have great training as always thank You so much for watching the video and Have a prosperous day

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