Tips For Beginner Before Investing In Stock Market
When it comes to investments, the stock market is definitely a solid option if you want to gain a lot more at stock trading company in Malaysia than just relying on your cash savings.
Cash savings, or money that you save in a bank, usually gets compounded and you will get a lot more in the process.
However, the interest that you will receive still will not equate to huge gains, something that the stock market can provide.
Do note that investing your money in the stock market involves some risks. Think of it as a bit of gambling where you can strike and win big, but there is a risk that you could lose everything as well.
After assessing this fact and you still want to continue to trade, then read on to find out how you can get started:
1. Get Acquainted with Shares
A stock or a share is a sort of legal ownership of a company. There are two ways you can acquire some shares- you can either go to the stock exchange and buy them from there or you could find a company that is doing an Initial Public Offering and purchase them directly from the organization.
Once you’ve acquired some shares, you are essentially a shareholder and you will have owned a portion of the company, albeit not too much.
If you’ve invested in the company and acquired the majority of the shares, you are basically reserved a seat on the board and you can start making decisions for the betterment of the company.
2. Stock Exchanges
Stock Exchanges just refers to the actual place of trade. This is where all transactions are being made- whether you trade using an online platform or trade using the traditional method of calling your broker by phone.
There are major stock exchanges scattered all over the world. In the UK, the major stock exchange is the London Stock Exchange or LSE. In America, one of the major stock exchanges is the popular New York Stock Exchange or (NYSE).
3. The Importance of Shares
The shares or stocks are important because it is a way for you to earn big bucks. There are two ways you can get money from them:
- Share Trades– Where you buy or sell shares to gain money. You can be an active trader and frequently make trades on a daily basis or you can hold on to it for a longer period of time until a suitable transaction can be made.
- Dividends– When a company earns some profit, a shareholder is entitled to receive a small portion of that. Dividends just refer to the payments a company gives to their shareholders.
4. Share Pricing
The prices of the shares depend on certain factors such as:
- Local and International Economy
- Industry-Specific Events
- Company-level Factors
5. Start Trading
To start making trades, you have to contact a stockbroker- either through phone or online. They will be the one to conduct the trades for you just by telling them what company you want to buy shares from and the volume of shares you want to purchase.