There is a fight between the Top Richest People in the world. That who can be the richest amongst all. Stocks are the commodity they have. It’s an actual asset that gave them real worth. It’s the value of Stocks at Stocks Market. That determines the net asset of those rich people. Here in this blog, we would guide you on how to invest smartly and to understand the stock market.
Now, before entering the stock market you should answer this question yourself. That is what kind of Stock Investor are you. Are you looking for quick money, If Yes, you should go for high-risk shares? That can yield high profits. But the Risk margins are also high. Are you a long-time investor, then you should invest in stable companies based on their plan and projections?
Stock Market Investing Beginners Guide | How to Invest Smartly in Stocks
Below pointers are important for you to understand before you initiate the buying process:
What is the Type of Shares
Shares could be categorized into the following types:
- Stocks
- Bonds
- Exchange-Traded Funds (ETFs)
- Index Funds
- Mutual Funds
What are Online Brokers?
There are two kinds of Brokers:
- one works for you for Full Time,
- another sort of Freelancing.
Later is also considered as Discount Brokers.
Benefits of Full-Time Brokers:
- Full range of traditional Brokerage Services
- Financial Advice for retirements
- Health care
- Everything related to money
Benefits of Discount Brokers:
- Some tools to manage transactions efficiently
- Robo- Advisory Service
- References and Case Studies
- Online consultation
What is the minimum amount required to Start Investing
Well to be very honest it could be as low as 100 USD. But most financial institutions have some minimum deposit requirements. There are Mobile Apps, Websites, Bank Services, IVR, email, CRM, and other means where you can create an account and start investing. Every platform has different trade rates and commissions.
What Commission or Fess they Charge to start Trading
First, you have to deposit some amount let’s say 1000 USD. The same amount can be used to buy stocks, that is the amount in your wallet.
Now in stock either you buy a share or sell the share. In both cases, there are transaction charges, commission fees every platform charges.
So let us say you buy a stock worth 100 USD, they can charge some percentage of this transaction. (between 2% to 10%)
How to choose what Stock to Invest
Every stockbroking platform has an option to check how share has performed over the years. Now based upon those performances you can choose what stock suits you. You also need to be active on Business websites to understand what companies are trying to do in the future. And based on that, you can buy shares at a lesser price and could sell later at higher.
To understand this better let us discuss the Following Situations:
Situation A: There is news that Company A would be funded by Company B. And Company B is one of the largest companies in the world.
- STOCK INVESTMENT GUIDE: Now if the authenticity of this news is correct. You should immediately buy good shares of Company A. Because after funding its valuation would increase. That would help the share value go up.
Situation B: There is a Company R that is Growing well in a couple of years and the stock value is also good. But recently the company CEO was in news for some negative aspects.
- STOCK INVESTMENT GUIDE: Any company or its employees if are in bad or negative news. This impacts the value of shares. So we should avoid investing in such shares.
Situation C: You have a good budget to invest but you are confused about whom to invest. And you are looking forward to long-term investment.
- STOCK INVESTMENT GUIDE: You should invest in Fortune 500 companies that have a steady growth.
We hope that now you understand what the stock market is and now how you can start your stock market trading. If you have any questions please feel free to comment.
