If you read this article, you are probably in a situation where I was half a year ago – you want to buy stocks, but do not know how to do that and where to start. Going straight to the headquarters of let’s say Apple for buying their stocks doesn’t sound like a good idea!
For a long time I was thinking about investing my savings somewhere where they would work on me instead of staying untouched. Many people today realize that investing in financial market is much more profitable than depositing your fund into banks.
Getting deeper into stocks investment I learned that there are two main types of investors:
The first buy stocks of various companies for years. For them it is similar to investing in banks, but buying stocks is more profitable and prestigious.
The second type of investing involves trading in the financial markets. This type of investors makes their income by buying stocks cheaply and selling them more expensive in a relatively short period of time like a week or a month.
But in the second case, you must spend time on your investment work: you have to monitor the situation of the market and watch changes of the stocks’ prices. Short term stocks investment is a risk, and I am not ready to accept it, despite the fact that all my investments were successful and the stocks I bought already increased in price by 20-30 percent. I am very pleased to receive dividends, however, recently I was so fascinated by the stock market so I used all my income from stocks investment to buy more new stocks.
Now let’s talk how and where to buy stocks.
First, you need to decide stocks of what companies you want to buy. If you, like me, want to protect yourself from a risk of devaluation it is better to buy stocks of stable and big companies. There is also another approach for choosing which stocks to buy: making some risky investments in promising, but not yet reliable companies. For example, those who have invested in Microsoft stocks years ago got high profits from their stocks. On the other hand, many people have invested in dozens of start-up companies, which have gone bankrupt, and the money of all investors was lost. After all, we can not know whether a startup company will be successful or not. It’s up to you to decide. In the end, you can use part of your money to buy stocks of some stable companies and the other part for other stocks.
Once you have chosen your stocks investment strategy, the rest is very simple.
According to the law, a person can not buy and sell stocks without any agent. Agents are the investment companies that buy and sell stocks for you and on your behalf. You can go to any investment company that works with private investors, and sign a contract. You bring cash or wire money for your selected stocks, and usually the same day you will become the owner of these stocks. Later when you want to sell the stocks, you will again have to do it through the some kind of an investment company (not necessarily the one in which you have bought them at.)
The easier way to invest in stocks is to buy and sell stocks online. Today there are a lot of online investment companies that allow their clients make investment actions from their own computers at home. This process is very simple and takes minimum time. You are choosing the stocks you like from a list and purchase them with a click of a button.
I hope now you know how to buy stocks. The other very important thing in stocks investment is picking up the right stocks to buy. What do I mean?
Let’s say you want to buy stocks of Microsoft. You can analyze the price charts of the stock and choose the time to buy them when you think the price is very low and it will rise soon. Knowing the basics of technical analysis may help you in analyzing the charts. As you know the financial markets never stay on the same level. The prices of any assets are moving up and down all the time. The general purpose in stocks investment is to buy stocks on the decline of the market, and to sell them when the price goes up. If you still have any doubts about stocks you want to buy, you can consult to any financial consultant or to the investment company through which you are buying stocks.