10 things you need to know before investing in stocks

1. You don’t need to have a lot of money to buy stocks. 

Don’t expect to feel rich, start now. Each intermediary marks their minimum input amounts, some are from $ 10,000 pesos. Another way to start investing as soon as possible is through equity mutual funds.

2. A stock worth one peso may not be cheap and one worth $ 200 may not be expensive.  

The price of the share is irrelevant, what matters is the expectation of growth of the company’s profits and the valuation of the share

3. Do you think to invest or speculate, both are worth it.

The common perception of investing in the best  stocks is that it is a game of chance where fortunes are won or lost in a matter of seconds. The reality is very different. In general terms, shares are acquired to obtain a return commensurate with the risk assumed. Prices increase or decrease depending on the behavior of the companies’ profits and market conditions. Ideally, give your investment time to mature.

4. Stock and non-stock market shares (considerations). 

Marketability is an indicator that considers the traded volume of a share in the market during the last 6 months and helps us to identify its degree of liquidity. Based on their marketability, the shares are classified as high, medium, low or minimum. In other words, it tells us how easy it is to buy or sell a stock. The marketability depends on the number of operations, the volume traded, the amount traded and the number of brokerage houses participating in the purchase or sale of a certain security.

5. Look for stocks that pay dividends.

It is true that in Mexico there are few stocks that have a solid dividend policy, but there are and they are a source of cash flow for their shareholders. Fibras in particular are shares that by regulation have to distribute a high percentage of their profits as dividends.

6. You can buy Mexican and foreign shares on the Mexican Stock Exchange.

The BMV has a section called the International Quotation System (SIC) where you can buy and sell foreign stocks, allowing you to diversify your portfolio.

7. The lots and peaks.  

For shares, the lot is 1 title and the minimum to set a price is 100 titles when the price is less than $ 200 pesos. When the price is equal to or greater than $ 200.01, the lot is also 1 title and the minimum to set a price is 5 titles.

8. Review the commissions.

Commissions vary between brokerages. If you do not move your investments, the commissions may be insignificant, but if your idea is to be very active it is important that you pay attention and compare.

9. The multiples and how to use them.

The multiples are valuation indicators that help evaluate the relationship that the share price has in reference to the results of the company. The main ones are: 

Price-Earnings (P / E)  = Market Price /  Earnings per share (EPS)

Price-Book Value = Market Price /  Book Value (BV)

Price-Flow per share = Market Price /  Flow per Share (FA)

10.  Hours and fluctuation parameters: 

The capital market operates through the Transactional Negotiation Engine (MoNeT), which is the electronic system of the BMV.

The pre-opening hours are from 8:00 am to 8:25 am. Here bids are received but not executed.

Hours of operation are from 8:30 am to 3:00 pm.

There are 2 types of operations: continuous operation and auction operation.