Buying your first stock is both exciting and intimidating at the same time. With a single click, your hard-earned money is left at the mercy of the stock market. That is why, if you want to make money in the stock market, you should always do your homework before you invest. But what exactly does that involve? How much research is enough? Or more directly, how do you know when you are ready to buy your first stock?

Your investing touchstones

Before we start, there are three investing principles to keep in mind. Call them touchstones, or reference points you can go back to throughout your journey as an investor. Firstly, when you buy a stock, you are becoming a joint-owner of a business. For example, if you buy shares in CapitaLand Integrated Commercial Trust (SGX: C38U), you are getting a slice of the rental collected from...