Ways to invest in the stock market

What are the ways of investing in the stock market?

At the beginning of your adventure with the Stock Exchange do not invest large amounts of money and if you want to see how it works, then just buy a monthly stock for little money.

To do this, open a brokerage account at the brokerage house. These are intermediaries who will buy or sell shares on your behalf.

When choosing a brokerage house, consider at least some parameters such as:

Fees (opening an investment account are usually free of charge), but you will have to pay for it, though there are promotions. You can count on a free investment account when you own a bank account that also runs brokerage houses.

Commissions (the brokerage house will charge commissions on buy and sell orders and will depend on the type of investment account.) The lower is in the case of online accounts (from 0.2 to 0.4 percent), higher Up to 1.2%) when ordering in person or by phone).

Number of customer service points (if you are traveling a lot in the country, choose a brokerage house with a relatively well-developed customer service network), the points are divided into full-scope and non-part-scales. You can basically just place an order, and that's not always the case.

Now you just have to choose your stock trading strategy. If you have even a small amount of money, you can already start an adventure with the Stock Exchange.

Warning! Do not invest at the beginning of all your savings. Remember one of the basic rules of the stock market: "Invest only those funds that you will not need in the foreseeable future."

Ways of investing on the Stock Exchange

You have several choices for investing in the stock market.

The most important thing is:

Fundamental analysis of the stock exchange

It is based on the results of the companies for the selected period. In a nutshell: you choose those companies whose price is low (the so-called low, the ratio of price to book value, price to profit, P / E). You will need to draw your attention to companies that have competitive advantage, are well-managed, pay annual dividends every year, report more and more profits every year.

Warning! It is also important that the debt ratio is low and high return of equity.

Technical analysis of the stock exchange

In this case, it is an attempt to predict the future movement of a company on the stock market with charts of its current behavior and trading volumes.

You will look for appropriate trends (upward or downward), support lines (below which the course should not fall) or resistance lines (above which it should not rise).

Bessa and the boom on the stock exchange

Here you follow the trend. During the stock market boom, which was, for example, caused by very good results of the economy, most companies, even the weak ones, are expensive. Conversely, the situation looks bode and most companies, also the good ones are falling.

Warning! After a strong overestimate you can always expect a rebound up. Similarly, when stocks do not go up for a long time, expect that investors who were in their possession will begin to exchange them for cash and thus fall into quotes.

IPO public offerings

In this case, investing is that you are buying stocks just before putting them into stock quotes. A good public offering should already be at the start (between IPO sales and the first quotation on the stock market) to bring profits not only to existing shareholders (if they are sold rather than the "papers" of a new issue) but also A lot of small investors.