Filed under: Advice,Finance

The crisis that has been upon us might have scared many people out of the markets, but this might be the perfect time to learn how to invest. As prices to value are lower than they have been for many years, bargains are ready to be found by patient investors. One of the most talked about methods of investing is “buy and hold”, and this is probably the best methodology for beginners to start out with.

The fathers of buy and hold are Benjamin Graham and Warren Buffet, the latter being the far more famous of the two. Both investors preached the importance of understanding the difference between the price of the stock and the value of the stocks underlying company, or assets. There teachings have helped thousands of beginner investors around the world to stay clear of speculation, which they deem no better than buying lottery tickets.

As for learning buy and hold, the best way to do this is by studying the masters. You might not be able to replicate exactly what they have done, but you will get a pretty good idea what kind of principles they have adhered to and the framework they have used.

Investing in stock might be a bit daunting at first, and this a feeling you shouldn’t take lightly. One of the key teachings of Buffett and Graham is to NOT invest in companies you do not understand. Investing without understanding what an investment is would probably be even worse.

So the first thing you need to do is get a grasp of the basics of what a stock is (ownership in a company), terminology, where to buy and sell stock, etc, before you dip your feet in. If you need help, go to google and search for “value investing forums” and ask an expert. Of course, be careful, because many of the people claiming to be experts are not. A good forum to start with is the Fool.com forum for Berkshire Hathaway, which has several value investors on board and ready to help.