A Newbie’s Guide to Investing in Stocks
Nothing beats financial freedom! One way of turning that dream into reality is through investing in stocks. A lot of opportunities await in the stock market so long as you know the ins and outs of it.
But before delving further, let’s acquaint ourselves with the terms revolving about this topic.
Stocks. Stocks are what we call shares of ownership. You will become a part owner of that publicly listed company if you buy their stocks.
Your share in their future earnings can be of dual effect: positive if they earn and negative if they go through losses.
Stock market. You can trade shares of stock in a stock market. Every area has their own stock market relative to their economy and business industry.Stockbrokers.
There are stockbrokers available to ensure the best return on your investment. They are licensed agents, individuals or representatives of an organization, that deal with stocks.
Since we’re now familiar with the terms, let’s proceed to the steps.
1. To start investing in the stock market, you need to have a stockbroker.
It can either be through a licensed salesman or through online brokerages. Choose the stockbroker that will best cater your needs and, of course, one that has great feedback and reviews from its clients.
2. After choosing a stockbroker,
you’ll need to open a stock brokerage account. It can easily be accomplished since online stockbroker sites simply lay out their steps on their web pages and interface. Fill out the forms provided and mail or personally send them back to their office.
3. Now that you have your stockbroker and your account, to actually earn, you have to invest. Fund money in your account to start trading. Some stockbrokers require a minimum start-up capital.
One benefit of choosing an online stock broker is that almost all of them accept online banking transfer which is more convenient and hassle-free for clients.
4. Place your buy order. Since you currently don’t have any stocks, you will need to buy shares of stock from your desired company. You can call your stockbroker or place your order online.
It is better to buy stock regularly with the same amount over a span of time. In that way, your money will consistently grow with time, and you can benefit from cost averaging.
5. Nothing lasts without constant monitoring. Check your investment as often as you can. The market is volatile. It changes from time to time, so it will be to your advantage to monitor it regularly.
You may wonder why you should choose to invest in the stock market when there are other safe instruments such as time deposits, securities, and bonds.
History has proven that investing in the stock market will provide you a higher return on your investment over a period of time and you’ll be safeguarded from inflation costs also!
Time is also a significant factor in investing. Every day you invest is a day your money works for you. So, start investing sooner rather than regretting later.