How to Buy Shares - A Complete Beginner's Guide

Stock selection is much like buying a car. When you buy a car, and they may not simply with the first, that is the right color - you need to know. You want to check under the hood, or at least take the tires. If you do not know about cars, bring your brother or your father or someone who does. Most importantly, take your time. If you are not sure about the mileage, or passed the sound from the exhaust on it and wait for a better offer. It's no different whenPick stocks.

The first thing you need before you buy shares in a company is a stock trading account. For this you need a broker. If it is the first time, I recommend using a discount broker. This type of broker, your purchase and sell orders, and little else. Where do you find to go to a stockbroker? Try your bank. It could be other less expensive options, but your bank is a place you feel comfortable, and you know how it works. Chances are, if you have an accountwhere they can help you start a stock trading account easily and at low cost. I trade stocks with online banking.

On your first purchase, you want to buy what you know. Take a look at 3 companies that you like - companies have bought things from you or know about people. Pick up a newspaper and write on these four things:

Price - If the stock is $ 500 per piece, you want a once-in that skip.

Year's Move (YM) - This is how much the stock rose in valuelast year, and a pretty good idea of the company will try to beat this year.

Dividend yield (DY) - This is a percentage of the value of each share that the company pays to shareholders each year. Some stocks pay no dividends, make (but with more growth for shareholders if the company paid the money) can make the company more valuable.

Price / Earnings (PE) - This is simply the price of the stock, divided by how much the companymade in this fiscal year. This figure may be misleading, depending on the phase of the current fiscal year, but basically a low price-earnings ratio means that the company's stock is on the right for how much money the company will be greatly appreciated.

Either underestimate it, or share and could go through the roof every day. If the ratio is high, meaning that the company has a lot of projected growth, but little actual gains so far. This was during the "Common InternetBubble ", when the company huge opportunities, but not yet paid no money.

Once you have this, it's time to get some graphs. For the company website and click on "Investor Relations". Download everything and see to read the charts of stock price and dividend for the last year, 3 years and 5 years.Now the newspaper. Not on the front page, the drills on the back for money. Most of these texts are fairly easy to read, and read for a fewWeek you get a pretty good idea of what's going on in the world of high finance.

Stock selection is about more than the knowledge of the company. It's about knowing what's going on in the world that will affect the company. Now it is time to decide on your goals and buy a case. First, write what you want from your investment. You want to build on the capital for more than 10 years, or you want to double your money in one year, but that the risk of losing half? If you are the firstthen you are a growth investor. Otherwise, you're a value investor. It could somewhere in between, but since this is a first purchase, it would be a good exercise to pick stocks based on a strict investment philosophy.

Buy your opinion: This is an argument for or against the purchase of the stock. In it you must write:

What's going on in society in terms of new business models, new directors, new businesses, new debt and new acquisitions / disposals of subsidiaries, etc.
What'shappening in the world that could be the company's ability to make money to affect
The worst thing you can imagine happening. Think about the one thing that would make your company's stock plunging more than anything else.
Like many pessimistic thoughts, as you can imagine why you should buy these shares
Why do you think it is a good time to buy shares of this company

Finally, before buying shares, ask the people. Ask someone who works for the company or ask an investment advisor, even ifYou have to pay them. If there is only one factor that you have not taken into account, your entire equity trading experience can be very painful.

Remember, the purchase of shares is not gambling if you know the rules. Understand your risk and can not accept any make of using. Avoid start-ups for an initial investment - you save for riskier stocks, if you have more confidence.



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