Want To Make Money In The Stock Market?
11 of the best articles from Building Arks to start you on your wealth-building journey through ownership of public companies (updated May 2022).
For many years, the only thing I knew about investing was that I should sock away money every month in my 401k in low-cost index funds. So that is what I did, and it gave me a great start to building wealth. However, I always knew that there was more to the stock market, but I had no idea of how it worked or what to do. It was something of a black box to me.
Then, during the lockdown in 2020, I came to a realization.
I had money set aside to buy the dip in the S&P 500 that I knew would come (I had been preparing for a crash for a couple of years before Covid). I didn’t know what would cause the crash, but I know that they always happen. However, the S&P 500 never reached a good price based on historical levels, so it left me on the sideline, afraid to pull the trigger. The S&P 500 then started to climb again due to the strong stimulus from the government.
Having missed the dip in the S&P 500, I started to research how famous investors like Warren Buffett, Benjamin Graham, and others found undervalued stocks. I read “Security Analysis” by Benjamin Graham and several other books that taught me how to analyze companies, estimate their value, and then buy them with a margin of safety.
So instead of having only one price to watch (the S&P 500, which I find overvalued), I now had a strategy that allowed me to analyze individual stocks and identify multiple companies selling for a bargain price.
This allowed me to start my journey as a value investor, which has helped me to generate very good returns since I started last year (beating the S&P 500 by more than 7% on an annualized basis from when I started to now).
But it took a lot of studies to learn how to do this, and then I had to be confident enough in my methods to put real money at risk. Although my track record is a short one, I…
