If you’re new to investing, you might consider an educational route to getting up to speed on the stock market and how investing works.
You have several options to choose from, which aren’t mutually exclusive, you could:
- Study investing textbooks or other investing non-fictional
- Attend a class on personal finance & investing
- Learn about finance through formal college education
- Follow a mentor and learn from their advice (and mistakes)
Online investing courses can actually fall somewhere in the middle of all of these options, for the following reasons:
- They usually consist of the written word, so feel a little like self-study from textbooks or other guides.
- They have a course structure which will see you move from topic to topic like taking classes.
- They’ll provide a rounded education which will touch upon academic theory.
- They could include personal anecdotes and experiences from the author.
So that’s what an investing course can feel like – but what do you stand to gain from taking an investing course? Would it be enough to justify a dollar a day course costs?
What are the advantages of signing up to a free or paid course, compared to going it alone and just picking up skills as you go along?
1 – Confidence in your investing skills
Signing up a course will provide confidence in your skills. The advantage of a course, compared to entirely self-directed learning, is that the content has been curated for you. This means that upon completion of the course, you should feel like you ‘know all the basics you feel you need to know’. There’s a sense of comfort and security in having fully completed a course, compared to just dipping in and out of content at your leisure.
You may also have the opportunity to take quizzes or tests in the course to check that your understanding is correct. This option isn’t available with a book, and therefore this valuable feedback is quite unique to courses and more formal learning.
2 – The patience to wait
Any investing course worth its salt will show you the historical returns of the stock market. This will be a turning point in the way that you view the stock market. With the hindsight of looking at the last century (or more!), you will begin to discover how stable the stock market is over long periods.
There have been countless wars, scandals, crashes and economic recessions during that time, and yet the stock market has continued its march ever upwards (over long term horizons).
This will arm you with the patience you need to wait out difficult periods and slumps in your portfolio’s performance.
3 – Psychological support during tough periods
An investing course should be dealing with the knowledge aspects, but also the psychology of investing too. Investing is about the application of academic knowledge to live events, which can unfold quickly, at the wrong times and with high stakes. Knowing how to deal with each money challenge is not something you can learn from a quick magazine article.
This creates a degree of pressure to financial decisions which some investors cannot cope with.
However, a good investing course will cover topics such as when to buy, when to sell, and what to do when the stock market crashes. These aren’t hypothetical ‘ifs’, these are definite ‘whens’. It’s just a matter of time before any investor bumps into these types of challenges.