Shares are a ownership of a business where you can own part of that business. The share price that you pay reflects what the market believes the value of that business is as the prices will fluctuate depending on what investors feels whether shareholder is confident about the future profit of that the business is likely to make. The shareholders confidence is based on lot of things including consumer sentiment, politics of the day, changes in buying trends over time, the health of the business balance sheet and competition.
Learning how to buy shares is important thing to remember before a shareholder buys a share. For many people the thought of buying shares is really overwhelming, but for those with strong hearts and courage buying shares for first time then you will need to thoroughly prepare yourself both mentally and emotionally.
During the past days there was a need of a stockbroker and a reputable printed paper to advise on buying shares, but these days there is a fully loaded information websites on shares. Though they provide information on shares but sadly are misinformed too, so beware as they are well written by professionally look very efficient so they often do convince people as they are genuine in buying shares.
For a beginner who want to buy shares they are being overloaded with people, websites and newsletters all claiming that they are the best stock pick for buying shares. One of the biggest obstacles for beginners when it comes to actually putting money into stocks, is knowing just how to buy shares of stocks, knowing what stocks to buy, when to buy it, and more importantly, when to sell it, the first step is always the hardest.
Investing your money in the stock market is best way to increase your invested amount for a long period of time. Trading shares of stock as it is a risky, one and should do this by experienced traders. While buying shares you must select the stocks or mutual funds with the intention of staying invested for more than ten years so that you can earn a decent return from invested money.
Follow the following guideline to buy shares if you are a beginner and investing your amount for the first time in share market.
- To buy shares the most important thing you should remember is to find out the stock you are willing to procure, how many shares you can buy, and you have enough money to buy shares.
- Doing research on the company where you want to buy shares is a must. Plan to invest carefully before committing money. Have a look at company?s share price divided by how much the company made in this financial year. This figure can be misleading depending on current phase of the financial year, but basically a low Price or earnings ratio means that the company’s stock is valued about right for how much money the company is making.
- For the beginner to buy shares for the first time you must find a broker which is the easiest way to buy shares as human stockbrokers is the more efficient way to buy shares quickly and receive direct communication about trading or else using a discount broker, such as an online site which is the easiest way to buy shares with limited fees.
- Make your stockbroker to buy the number of shares you wish to buy, and give him the money for buying shares. And if you are using a discount online broker, use the funds in your account to purchase your desired stock and fill out an application and follow the steps. And after you can directly buy shares from a company by contacting the company without using a broker.
- Before you buy shares be aware of all online shares companies which have bad reviews, just because there will always be a few dissatisfied customers for whatever reason. Just stay away from the companies that have more bad reviews than good ones. You can find reviews online by typing the company name, followed by “review” into Google or your favorite search engine.
- You can buy shares and invest directly with businesses or companies, which is a rare process to do so though few companies offer this option which known to very few investors. The plus points in investing directly through companies without brokers costs the transaction very cheap. But the disadvantage is only few companies provide this and this could limit on your ability to buy good shares.