So Its been 6 years of investing for me, but this might be day 1 for you and that’s why you are watching video and trying to learn the basics. Hedge fund, mutual fund, Index funds, ETFs, Stock picking and magic formula. Today I understand all of this stuff, but when I first started, I felt like an idiot.

Lucky for you and me, finance people are very willing to teach. Because they make money also by teaching, it’s one of those fields where the more secrets you share the more money you make. So I learn everything. Today I’m going to teach you everything about these basics. And not just definitions, because that’s why google exist, but I want you to really understand it, I want a 5th grader to watch this video and understand it.

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Chapters:
0:00 INTRO
1:02 WHAT IS THE STOCK MARKET?
3:09 THINGS TO BREAK DOWN
3:30 INDIVIDUAL STOCK PICKER
5:02 MUTUAL FUNDS
7:51 HEDGE FUNDS
11:22 INDEX FUNDS
14:41 ETFs
18:09 THE MAGIC FORMULA
18:58 WHICH ONE TO USE
19:33 OUTRO

So the first thing is this, when you think about the stock market, I want you to imagine marketplace where you go to buy stuff. But instead of buying things you don’t need, you buy businesses, but because we can’t afford to pay 2.65T for apple we buy a small piece of the company called shares, which then makes you a shareholder and also makes you entitled to the profits if they give a Dividend payment.

Now obviously we all have ONE Goal with this Game of Investing ( it’s to make Money ), you squeeze lemonade to make lemonade or to sell it and make money obviously. So to make money in the stock market you are alone, so you have to pick a strategy to make money. You can go about it on your own, Higher a professional or following someone else strategy.

individual Stock Picking 1792 ( when the stock market first started )

This just means you yourself are picking business to invest money into

back in the days and today, because would just pick the business that they think are going to make the most money

Mutual Fund 1924

What it means is simple, imagine this, people want a professional company to pick their investments for them, and to try to make them the most money possible

Hedge Funds 1949
Well a hedge isn’t for the just anyone, its more exclusive, its for people that are accredited investors ( net-worth of 1Million or income of at least 200k a year )

Index Fund 1975 ( started by Bogle )

Now this got a lot of flag when it first started, because its investors and professionals literally saying Jesus take the wheel

But seriously: don’t get confused ( an index fund is a type of mutual fund )

The main Difference is this:

Index funds have a different mindset ( they are more passive, rarely ever sell stocks and they have a lot lower expenses ratio can be .1 or .04% ( basically nothing )

Each Index Fund invest into a specific basket of stocks ( to get the overall performance of that part of the market )

And in 10 years you would have made 7x your money

ETFs – Exchange traded Funds 1990s

The big problem was that with index funds, mutual funds, hedge fund, they have a certain amount of money that you need to invest to get started

Magic Formula 2006

You can have a computer pick your investment for you

And you create your own little index fund or undervalued stocks

This I cant explain in one video ( but it’s a way to beat the market )

Full video link: https://youtu.be/kWMj79oU6Xw

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*Some of the links and other products that appear on this video are from companies in which Tommy Bryson will earn an affiliate commission or referral bonus. Tommy Bryson is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. I’m an Accountant but I’m not your Accountant, always review information with your Accountant/CPA and your Financial Advisor.

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