 All right, good evening everyone Russell Moore coming to your live from Dedicated to financial literacy. It's my channel Started this channel good last year two years ago two years ago started this channel basically for friends friends. We were talking about disgusting Investing the stock market and people were asking me about it questions they knew I was into the market and But you know during the pandemic we couldn't really get together or have groups so I said, you know what? I'll just do a YouTube for my friends and family and now people been asking me like and you know the channel hasn't blown up or anything like that but People are asking me. Hey, you should do more videos and so I've you know I've been doing more and more and coming on more and more and Giving content so you don't hit the subscribe button. Give me a little thumbs up. I would love that and The hit the notification bell as well so that you can be informed whenever there's content It'll whenever I do a video. It'll go to you. Okay, so anyway It's been a long year But it's a long year, but it went by fast didn't it? Yeah, and so um and I Did a video like this last year. It's called a stock market for beginners But this year I'm doing it again. I think I'm gonna do it again and again and again and again I love beginners and people that are just starting. They're so hungry. They want to hear more and more about the market and So this one is called that market for beginners 2022 and I hope you enjoy it and My whole heart my heart is that for people to learn and point people towards investing. It's not easy It's not it's not simple, but I always say this. This is my my main Quote I would say my own personal quote that I say all the time and that is this you will not earn if you do not learn Learn that's the key for the new investor out there um Learn as much as you can as you step out and step out and start, you know trading in the market and Investing in the stock market Learn, okay, if that may be by you know, YouTubes, but I want to plug something real quick this book right here I did this last year. I'm like Let's stock market for beginners video and I'm gonna do it again this year because it's a great book No, I'm not getting any money for it that I'm not but they're not sponsoring me or anything like that. I'm not into it's just a good book and I've had several copies I'm always giving them away and the name of the book is the neatest little guy to stock market investing And it's by Jason Kelly. He does a great job of breaking things down It's very practical and I would say that if you're just starting in the stock market pick this book up Amazon Okay. All right. So anyway, let's get to it about today's video. I've got like 15 Statement questions that I've listed here and what I'm gonna do is I'm gonna break them up so that it's not over This isn't too long. I'm gonna break it up into three videos and hopefully you'll keep watching each one and Engained and gain some knowledge gain some insight about investing in the stock market and So I'll start off with the first five and then I'll you know go to The second five and then the third five of three videos Okay, and so give me about probably a week to put out all three all three videos Okay, and well, let's go ahead and get started. I hope you're excited and you know, and I pray for you I pray that you have a wonderful wonderful 2022 and no matter what happened in 2021 Hey, I believe it's gonna be great things awaiting you in 2022 believe your family your friends your co-workers I believe you're gonna prosper this year and I wish you the very best. Okay. All right, so let's go ahead and get started All right, here we go. All right number one Why are stocks a good investment? Well, why do you think if stocks are a good investment? You should write that down Why do I think stocks are a good investment and do I think stocks are a good investment? Well, here's what I say Number one. Here's what I would say And listen, I'm not an expert. I'm not Kathy. I'm not Kathy Woods, brother obviously skin tone Don't have a background in economics or you know investing Didn't work for a hedge fund. Just a brother just Eager eager to learn about the market and wanting to make things better for my family my friends my church And everybody that I meet. Okay, so that's me But I will say this Why are stocks a good investment? You want to ask yourself that as a new investor? Why do I want to why do I want to invest in the stock market? You want to ask yourself that why do you want to invest invest in stock market? Is it just to make a quick buck? Is it because you're you're Financially you're frustrated. You're like I don't have any money and I and the stock market I hear that you can make money in a stock market for I'm gonna get in it Yeah That might work temporarily But ultimately you want to sit down and say, you know what? The reason why I want to get into the stock market is this and this and this and this I'm gonna tell you my vision for the stock market. One of the reasons is to become more financially independent That's one of my reasons. That's the second reason is for my son. I'm when I leave this earth When I leave this earth one day, I Want to know two things that I've done everything that God has asked me to do and that I've left enough for my son and my wife That's it for me And that I've been a blessing to my church and the body of Christ Okay, and then the third the third thing is is I've helped as many people as possible as far as becoming more financially literate and That they would be dedicated Okay dedicated to financial literacy All right, so that's that's my goals. Okay, this is why this channel exists. All right So but the first thing I would say about the stock market to is this is that you become an owner When you invest in the stock market when you invest in a company you becoming owner of that company So if you say hey, I want to put money in Microsoft I want to put the money in Microsoft I want to take some money and buy some stock in Microsoft. You become an owner of the company You become a shareholder There's no one here in Particularly in the United States that have come to a place of wealth and riches without owning something I'm not saying Chase riches. I'm what I'm saying is if You want to become more financial that financially independent You want to own some things a Company real estate stocks and some people might say Bitcoin Crypto, so We'll leave that for another time. All right, the second reason I would say is this In the last hundred years, there is no entity investment entity that has gained on a consistent basis On a consistent basis like the stock market seven to ten percent and some years much more than that Some years less, you know, you have your crashes and your dips your corrections But for the most part It's gained seven to ten percent You can't get that out of your savings account Some of you got a savings account. You're putting money in that savings account You got money going automatically from your paycheck into your savings account and yet your savings account The only money that you've gained is the money you put in there Because the yield is so so small I'm gonna give you a hack a in a suggestion Of what you can do Why not take that money from a savings account and put it in in an index Fund and we'll talk about that. That's in the second or the third video the difference between a sec index fund The index fund versus individual stocks the pros and accounts. All right But you're wasting your money because here's let me tell you something But I didn't mean to get off all into this but I feel like I need to share this with you Right now the CPI consumer price index look it up in our government our government web website and Inflation right now It's about four percent. I know they're telling us two percent three percent Listen, it's more like five percent and Headed towards six to seven percent It is not transitory in other words. It's not gonna be temporary It's gonna be here for a minute Eventually, yes, debris things will depreciate. Okay, we'll get some depreciation. All right, but not now Inflation's gonna be here first. You'll have to unlock your device Sorry, that was my phone. Sorry. I didn't understand You need to be quiet Hold on a second, but I'm not gonna edit this you're just gonna get all of the rough and the raw all right so um Yeah, anyway, I'm trying to turn my phone off so it doesn't keep talking to us But like I was saying because of inflation Your savings account when you put money in your savings account Inflation is above it So You're not your money is not doing anything. You're actually losing money. Your dollar is it's devaluing So that's why you want to put it in something that's exceeding inflation So if I make ten percent this year on the stock market, but the inflation was five percent That means at least I made five percent But if you're in a savings account You're in a savings account and there's no yield. You're not getting any percentage. It's no gains and the inflation is five percent Guess what you're in the loss That's why sometimes it feels like there's holes in your pocket as soon as you get money. It's gone It's like where did my money go? Where did my paycheck go? inflation buddy Sister my brother my sister All right So a wise thing to do in 2022 say tell yourself look I'm gonna get away from these savings accounts Now if you don't trust and you don't know enough about investing then don't do it Leave your money in the savings accounts. At least it's there. All right, at least it's there And you can at least have a place where you're storing But take at least some of it fifty seventy percent and put it in something where it's gaining and it's Appreciating okay, even if you do bonds although bonds are like what two percent three percent yield You're just gonna break even With inflation the way it is you still had a loss one to two percent It's the stock market or real estate gang. It's the stock market or real estate. All right Okay What is the stock market the stock market basically here is a simple simple simple simple answer about simple answer for that That this is for a new person. They don't know anything about it. What is the stock market? The stock market is a place where people buy and sell It's filled with thousands of companies And think of it like this when you go to the store you buy eggs You buy your eggs your milk your juice your fruits your fruits and veggies and all of that that you buy at the store What do you do you go into the store and you say hey? I have cash I want I want to buy this this this and this you give me that I give you cash That's what happens in the stock market There is an exchange. That's why it's called the stock exchange. You're exchanging stock for money for currency Does that make sense? Now I want to say this real quickly about the stock market Because everybody's like what is the exchange whether exchanges the stock markets You have the Dow Dow Jones industrial average you have Nasdaq and you have S&P 500 is also the Russell 2000 there are other markets as well There is small cap mid caps all that but we're just gonna do the basic four that you're gonna hear more about hear a lot about the Dow Nasdaq S&P 500 Russell 2000 now the Dow consists of 30 stocks all the Dow Jones is is an average The Dow consists of several industries several sectors So you might get tech Hospitality Bio tech you get several different types of businesses and it's 30 companies and it's an average It's basically saying this is a sample What these 30 companies are doing is a sample of what all the market is doing and then you have the S&P 500 It consists of 500 of the top companies Again, it's a sample. It's an average and then you have Nasdaq Nasdaq uses basically tech It's basically tech. That's where you got you know, you got you you got your Facebook Google Apple Microsoft it's the tech mostly tech and biotech stocks. Okay and it consists of Nasdaq hundreds about a hundred stuff hundred companies Okay, and basically all these are is it's a measure. It's an average of what the entire market is doing Okay, all right, and so So when you purchase a stock when you buy a stock Um You usually are gonna buy from one of those exchanges Something from the Dow for example Tesla Tesla's in the Nasdaq So Tesla when I purchase a stock for shares from Tesla I'm tell you I'm Tesla is in the Nasdaq. It's part of the Nasdaq exchange. All right S&P 500 you get you'll see McDonald's. Well, let's say the the 30 Dow 30 30 companies leave up McDonald's is in there into it IBM Boeing, you know companies like that industrials are in there as well. Okay, so you kind of got that All right, so now in the first thing that you want to do and I want to lay this out really quickly is that If you want to invest in the stock market, you can't just go You are what's called a retail investor Now there's an institutional investor and there's a retail investor the institutional investor is someone like a hedge fund management company Somebody like Kathy would that's a good name to remember. She's great. She's an amazing since she's done. Oh Man, she's done so many amazing things. She's having a tough year, but watch me. She's you work. We haven't heard the last of her trust me So a hedge fund or something like that, that's an institutional investors Wall Street the big boys they call them the suits. You'll get that term sometimes suits and I'm gonna do a video on terms just Lango every day Lango that you're here in the stock market And then there's us the common day every day people that are investing. We're called We're they call us a jail. No, we're not Whether they call us dumb dumb money we're the retail investors and so in order for a retail investor to and to Invest in the stock market, you must go through a discount brokerage firm such as TD Ameritrade Fidelity Charles Swab Robin Hood Weeble. These are discount brokerage. Okay? Now You want to open up an account? I'm not telling you how much money to put in $50 hundred dollars thousand dollars two thousand One thing that I usually will tell people if you don't I don't have any money to invest in the stock market Well, this is 2022. We're talking about right well taxes You get your federal tax refund fund. Hopefully you're getting a refund that you don't owe the government But it's a great time to open up a brokerage account is when you get your taxes Take a portion of your federal income tax refund and say, you know what? I'm gonna try it this year and I'm gonna take $500 on my thousand dollars unless of course you have a lot of debt If you have debt, take care of your debt first. I should have probably put that up there at the beginning Before you start investing Invest in your debt first take care of all your debts if you owe money credit card debt get rid of it Now you can do both But you should spend more time clearing up debt first and Then invest start investing your money Because here's what will happen if you if you if you don't take care of your debt You start investing at one point you're gonna have to take what you're investing and put it towards your debt Otherwise your credit score is gonna be affected. What if you you know you're trying to get a home or something like that? Take care of your debt. All right, that's the first thing 2022 crushed debt Crush it go after it go after it hard and then Start focusing your money in on the market. So anyway, open up an account put some money up And to start the brokerage account and in good you're good And i'm not telling you how much to put in again. That's what i've already we already went over that. All right, okay Last but not least IPO I think i went over number three and four. What is the stock? What is the share? It's it's stock and a share pretty much interchangeable you Share is you you're getting a share. You're sharing with other investors As you guys pull in your money to buy ownership in a company So you got a share Just like if you had a pizza and all the kids are there and then you cut up the pizza and you and you share the pizza By giving a slice the slice is the stock All right, okay, so we went over that number number five and we'll end with this. What is an IPO? IPO simply put is initial public offering Usually the the big banks Institutional banks are the ones that do IPOs discount broker terms do not do IPOs Okay, and so a company will say you know what we're trying to expand we need we need more money We need to raise money for the company. We're doing well. We're growing But we want to do even better. We want to expand or we got a new product and we need more money. We need research Rnds could jump in off. So what they'll do is say, okay, let's go from private to public And that's all an initial public offering is A company enters the market And become public so that other people Retail investors like me and you can go in and invest in that company and say We want to become an owner part owner of that company because we believe in it We think it's going to be great and it's going to do well and we see a great future and they've got a wonderful management team All right That's an IPO The reason why I wanted to add that on there is because many new investors when they first come into the market They hear about oh my god. You got did you hear this? of Joe and Joe is coming about to open up Joe and Joe is about to get into the market They're about to do their IPO. Oh my god. Everybody's gonna want that everybody's gonna get it. It's gonna go up to the moon It's gonna go to and so you end up going Jumping in trying to get that and here's when people make a lot a big mistake with IPOs They'll go in with a market order I'll do a video on market versus limit limit orders But a market order is how you purchase your stocks So in your brokerage account, it'll say okay, you want to buy shares in this company and it'll tell you it'll say Would you like to do a market order market order is you're at the mercy of the market? So basically Whatever you you're saying whatever I can get it at Whatever I can get it at and so well You can get it at a cheaper price or you can go high It's whenever because you got to remember somebody selling it to you You're trying to buy it somebody selling it Well, it's whenever someone whenever the whenever it's gonna be sold that can be it can go up up up and up and up And you can end up getting it for a much higher price than you expected And that's what happens a lot of times with IPOs People think oh, yeah, I'm gonna get in and wow it's gonna go to the moon And usually there's an initial sell-off because those init those institutional I'm gonna be nice The institution the institutional investors they start grabbing up all the shares so it goes it goes up, right? And you think yeah, I'm gonna put in as a market order But it's not letting you in and then eventually boom somebody sells it to you But then the market starts going down The same day is the IPO It was 20 30% You were thinking you were gonna try to get in at $30 But it went up it went up to 60 and then your market order your market order clicked And you were able to buy it at 60. You're like, well, wait a minute. I didn't want it at 60 But you put it in as a market order if you had put it in as a limit order now Well, let me see what happens you put in as a limit order saying this is my limit I am unwilling to buy this shares of stock above this price 30 bucks And if it does if it doesn't hit this marker below, I don't want it So it will it will not it will not trigger a buy That's how you can protect yourself in an IPO You use like I will not buy it until it comes down here Because normally you're not going to get it at the beginning As a retail investor Keep that in mind And so you put it in as a limit order limit order. Okay. I want to buy it at $30 even So it goes up to 60 And all the market buyers that they're getting it they're getting it that are like, oh, no And then it drops and as soon as it hits 30 Now I could go beyond 30 below 30 But at least You got it around the price that you wanted it And eventually if it's a good company and it's a good it's doing a great job. It's gonna go back up Okay, so I just wanted to tell you that isn't for concerning IPOs Anyway, that's gonna be my first five and we'll I know I went a little bit long you guys Hanging there with me the the next video will not be this long. I assure you and I want to welcome you to thank you and say bless you. Bless you. Bless you. You're gonna have a great 2022. All right Let's do it. Let's do it investors. That's right to the moon See you later