Introduction To Stock Investing
Investing is an activity focused on multiplying the capital put in. When you begin trading stocks, you invest money in buying stocks that you intend to sell at a profit. Investing can be either aggressive or conservative. Each method has its benefits and pit falls. Investing method depends on investor's risk appetite. If you have a high risk appetite you can be aggressive in your investments. Aggressive philosophy yield faster results then conservative one.
Next thing that you should know is the type of stocks. Two of the most common types of stock that you will find are Preferred Stock and Common Stock. Common stock is what retail investors like you hold in their hands. When you see the downward and upward movement of stocks, it is people like you. Preferred Stocks are less in number and give better dividend payouts. The voting rights for common and preferred stock are not same.
Trading stock is possible through online as well as offline channels. When you trade offline, you should either be on the Exchange Floor or you should have a broker. Online trading is possible through Internet. There are numerous firms which provide direct trading method and you can access stock market once you get an account. This trading account will have to be funded beforehand from your bank account.
Next step in trading stocks will be to begin researching various stocks so that you can begin to make buy and sell decisions. When you look for stocks, look for various financial ratios of the company. That will tell you about the company. Look at the market and industry the company works in. You will also get some clue as to the growth prospects for the company.
In case you face losses while trading you can easily cut down losses by selling the stock. Your strategy should be disciplined enough to help you brace the lows and highs of market. Never exit a deal in emotion if you are making losses, neither get into it when it looks too good to be true. Remember that you will make money only if you stay cool and work without heart. Stock investing will give great results if and only if you follow a strategy. It is a game of strategy not of emotion.
When you invest money in stocks take care of your whole portfolio. Investing all your capital in one company or sector is not viable strategy. Invest in different firms and sectors. That ways you can cut your losses when one sector is doing badly.
Stock investing is very paying activity in terms of returns. There are numerous resources which can be used for a through study of past stock market movements. You can read books, online material, reports and projections. All of this literature will improve your understanding of different stock markets and what makes them tick. If you are confidant that you have learnt enough, you can begin investments in stock and make money.