Investing for beginners: A guide to avoiding scams

Investing from scratch: A guide against charlatans

When someone first searches for how to invest in the stock market, they hit a wall: hundreds of videos promising impossible returns and very little pedagogy. A novice investor summed it up like this: "I don't expect to get rich investing, but at least I want to earn some extra income." The response from those who have been doing this for years is almost unanimous and, initially, disappointing: there are no shortcuts, no miracle courses, and the first enemy isn't the market, but oneself.

The most repeated consensus among veterans is that education starts with reading. Not one book, many. From the classic "Confusion of Confusions" to manuals on company evaluation, passing through specialized blogs on index funds and permanent portfolios. The underlying idea is that only by devouring diverse sources does one learn to separate the wheat from the chaff, a skill that, ironically, is more profitable than any prediction.

Psychology before charts

The most repeated advice has nothing to do with balance sheets or technical analysis. It's a phrase you must burn into your mind: "The market is what it is, not what you would like it to be." Those who say this argue that true understanding comes only after years of studying and trading with money you can afford to lose. In other words, learning is slow, painful, and cannot be accelerated by a weekend course.

From there, opinions diverge. Some advocate fundamental analysis to choose companies and technical analysis to fine-tune the buying moment. Others directly distrust both and bet on diversifying into funds that replicate indices, assuming that no one knows what the market will do tomorrow. Harry Browne's permanent portfolio appears several times as a formula for 90% of capital, leaving 10% to "play the lottery of guessing what markets will do."

Your bank is not your advisor

One of the most illustrative moments arrives when a beginner confesses they plan to trinc their branch manager's guidance. The response is a cold shower: "They will try to recommend the products that give them the most profit. They are all salespeople, even the manager; none is your advisor." The analogy is devastating: Can you imagine going to El Corte Inglés (Spanish department store) to ask about televisions and being recommended one they don't have so you buy it on Amazon?

The warning focuses on fees. While an online broker might charge €2 plus 0.05% to buy an ETF, a traditional bank could reach €20 plus custody fees. The conclusion is clear: for small amounts, any option works; for larger portfolios, the bank is rarely the best choice. And there always remains the doubt about "no-fee" funds that actually hide management expenses of 1-2% annually.

Emergency fund and long term

The last block of advice is the least segarro. Before investing a euro, you must have a cushion of two or three months' expenses. And it is advisable to forget the idea of a quick extra income: investment is a complement to retirement, help to retire earlier, not a monthly money-making machine. Those who promise otherwise, they say, are selling smoke.

The conversation turns toward distrust of gurus. It is recalled that Warren Buffett or Peter Lynch wrote their books after proving they knew what they were doing, not before. And an uncomfortable question is launched: Would you buy a carpentry book from someone you have never seen work wood?

In the end, the feeling left is the same as always: knowledge is within everyone's reach, but the road is long and full of traps. Is it worth starting today, or is it better to wait for the storm to pass?