Skip to main content

Investing in the stock market

How to start investing in the stock market?

Stock Exchange - a market where purchases and sales of shares, bonds and other financial instruments are made. Investments can be made by any adult, but only through brokerage offices.

If you are thinking about the stock market, then the first step you have to do is to set up an investment account (the so-called brokerage). Opening an account is usually free, and each brokerage office charges commissions on buy and sell orders that will be made through them.

Before you decide to set up an investment account, pay special attention to the amount of fees for running your account and commissions. Internet account access is also important, as well as the ability to track selected companies in real time without incurring additional costs.

Investing on the stock market with or without limit?

Once you have a brokerage account, it is time to take the next step and start investing in the stock market. An extensive system of stock exchange orders gives investors the opportunity to execute various investment strategies.

The basic division includes:

  • Limit orders;
  • Orders without limit price.

When it comes to orders with a price limit, the investor exactly determines the price (price limit) after which he wants to buy or sell the given price. The purchase order specifies the maximum rate at which we are willing to buy the instrument, and at the sale - the minimum rate at which we will agree to the instrument.

Warning! When placing an order with a price limit, the more favorable the price, the longer we can wait for the order.

If we are primarily concerned with the quick conclusion of a transaction and we do not want to risk that our order may not be fulfilled in its entirety, and at the same time we accept the price currently available on the market, then we place an order at any price.

By specifying the date (eg, one session per week or month) to which the order is valid, we decide how long our investment strategy is.

Warning! The expiry date of the order expires with the last calendar day of the year.

If the investor has a lot of free time, he may try daytrading (multiple buy and sell shares in one trading session).

Warning! Short - or long-term investments always involve risks. Therefore, before your first purchase of shares, you should draw up your action plan (investment period), satisfactory level of profit and acceptable loss level. For a wise investor not profit is the most important, but the protection of your capital.

A guide for beginners on the stock market

1) It is worth to use the knowledge of other more experienced investors, but do not mimic the biggest players blindly, because what is good for them, not always has to be good for us.

2) Start by investing small amounts of money. They should be money that does not burden your home budget. Do not risk all your savings.

3) If you will type a company, then analyze its quotation from the debut. Also make an impact assessment of the business climate (best to invest in those companies that least likely to suffer economic downturn). It is worth to look at the management, because the management is also an important factor.

4) Remember! - do not undergo emotions - the stock market needs attention and steel nerves.

5) Look carefully at the recommendations issued by the brokerage house.

Warning! The biggest in the business (Warren Buffet or George Soros) were able to take risks and invest money in uncertain times. Their fortunes have arisen as a result of: self-discipline, peace and faith that after fat years will come those greasy.

A conscious investor should consider whether or not to accumulate his portfolio when there are falls on the stock exchanges.


Popular posts from this blog