Investments in the stock market are a form of investment that requires special knowledge and training. FinanceWorld specialists are sure that only experts know how to invest in the stock market to get a profit. That is why the majority of private investors prefer to use the services of professional participants of the stock market who are familiar with its trends and will help to determine the direction of investment.
What is the essence of the stock market?
First of all, it is a source of shares of various companies, both fairly new and world-recognized in the international commercial market. The essence of the stock market of securities, as a source of income, is speculation in securities.
Imagine a trivial situation: a company that is beginning its work is out of money because although the rate of expansion makes it possible to obtain ever-increasing profits, it is still not sufficient for the speedy modernization of the business. For this, an operation is carried out (it is called IPO). Its sense is to sell the company’s shares to potential shareholders at nominal value. However, most shares do not settle on the shelves but participate in trading on the secondary markets.
To learn how to invest in the stock market, you should understand how it happens. This process is approximate as follows: a trader buys shares of a company that should experience a rise in the near future (for example, a deliberately successful product is being prepared). After the product is released and it turns out to be really successful, as a rule, the cost of such a share increases. It should be sold at this point as the owner is receiving as a profit the difference between the initial value and the value of the share at the time of sale.
Naturally, no one can avoid mistakes – even an extremely successful company, the professionals who know how to invest in the stock market, can make a mistake, after which the shares will drop significantly in price, then you have to sell them at face value, or wait for the next increase in value that no one can guarantee.
Three things you should remember about
When you are ready to learn how to invest in the stock market, remember about the following important things.
- The ability to analyze the market. Any trader should understand the principle of stock price change, i.e. see the prerequisites for higher, lower, or more complex fluctuations. Ideally, the trader must determine the moment when the value of the share falls only in order to grow later;
- Capital management. Such ability provides the trader with the opportunity to open and close transactions on time, providing him with the necessary reserve to continue trading;
- Psychology. A skilled trader thinks only analytically, because of the emotional component, at times, causes a person to miss the moment, which leads to a drop in profits, or even to losses.
Where and how can you buy shares of leading companies?
Most of them are now traded on the largest US exchanges, for instance on NASDAQ. At the moment, there are shares of more than three thousand companies, including the largest of them – Google, Apple, etc. However, only a few companies offer traders access to the NASDAQ stock exchange, the most reliable of them: Finam, United Traders, GT Capital Group, and SDG Trade. Which one to choose is up to you, but it is better paying attention to popular financial forums and reading customer reviews there. If you have never had anything to do with the stock market, then first learn the basics, the working terminal, and terminology. This will help you not to get lost at the beginning and not to lose money when you first start the terminal. Before you buy shares, examine the market, expert opinions, future changes, and other factors that may affect the price. Never be in a hurry to choose companies for investment, it’s not at all important whether you have Apple shares or some little-known company, the main thing is that they bring profit.
