Monday, June 4, 2012

Learning The Steps On How To Buy Stocks Online And Start Investing

We have covered the basic of investing and I encourage you to read the previous posts as those are the fundamentals before you start buying and selling stocks, and in this post we will be discussing about how to buy stocks. We are now going into the nuts and bolts, the actual steps that on starting to invest your money into the stock market.

At this point, you should be able to identify yourself on what kind of investor you are, as well as taken into consideration contemplating about your financial plans for your future. I have also covered, previously, a topic about choosing the good stocks to invest in, hopefully by now, you're ready with your chosen company or business where you want to buy stocks from.

Nowadays, trading is done mostly online, so we will be covering basically the steps on how to buy stocks online. If you're a beginner and have knowledge about computers and accessing the internet, you're half-way to learning to buy your first share of stocks that you are going to invest in your money.

Remember, if you're a beginner as advised, it is recommended to start in long-term investment first and work your way to a more advance and sophisticated way of investing as well as learning how to analyze the market and the company you're buying stocks from.

The Basics Of How To Buy Stocks Online


As I've mentioned, most trading these days are done online and it's convenient for both the investor(you) and the online stock broker.

Here are the steps;

  1. Decide which stocks you want to invest in.

  2. Decide how much money you're going to invest, taking consideration about your financial plan

  3. Choose a stock broker, call them and ask the requirements for opening an account. Also inquire about the necessary fees or commissions that they're asking for every trad you are making.

  4. Before opening an account with that broker, try to canvass at least 3 online stock brokers and compare their fees and the tools they have that can help you in your trading journey, not to mention, check some testimonials and reviews on each stock broker you are inquiring.

  5. Once you've decided and picked the broker you're going to signup with.. Open and account with them and make the necessary deposit if they require as well as accomplish the paper works they require, you might come to their office to complete the forms or send it through fax if they agree.

  6. Wait for your account to be activated, most of the time it is activated quickly specially if you're using an online payment system to pay all the necessary fees during the signup. If something goes wrong, don't be shy, call them and ask for support about things you're confuse.

  7. Once you're account is activated and ready, never make an actual buying or selling of stocks right away. What you need to do is, go through your online broker's platform or system and familiarize everything on how you're going to buy or sell stocks. This is very important as it will be a hassle when you start trading and you don't know the things in front of your computer monitor.

  8. Once familiar with the dashboard of the online trading system, always go with or use the trading simulator first before making your first trade. Most online stock brokers have trading simulators and this should be among the things you should be inquiring before signing up.

    Stock trading simulators allows you to buy and sell stocks but using virtual money, meaning, if you're making a mistake you're not going to lose real money, but virtual money instead. Simulators help you familiarize and setting your mindset before going into live stock trading.

  9. Now you're ready to start making a live trading. Make sure you've done your homework, choosing the stocks you want to invest in and the amount money you're willing to invest even you lose it.

  10. At the end of the trading day, whether you lose or gain, start analyzing the things that just happened, this is where you start learning the process of analyzing stocks. Perhaps on your first day of actual buying of stocks, you won't sell it immediately the next day.

    That's why before you go into live trading, you already have something in mind that you gonna hold for sometime while learning your way to day trading.
That's basically how to buy stocks online through an online stock broker. Before when the days of the internet was not yet widely utilized, conventional stock broker are used and you need to call them if you want to make an order or execution of your order. The difference with online trading is, it is done online by you(investor) through the broker's trading platform. It's faster and convenient.

Some Tips About How To Buy Stocks

Sunday, June 3, 2012

Stock Investing While On A Tight Budget


This is one thing the a beginning investor should know that when you start investing in stocks, you buy stocks from your online brokers and trade it on a regular basis. There might be a time that you just want to invest a consistent amount of money every month in stocks.

However, if you're busy with your current job or whatever it is that you're doing for a living and don't have much time to devote into actual trading, you can still invest in stocks on a regular basis. Say for example, you allocate $50 a month that you will be adding to your investment on a consistent basis.

This can easily be done through a type of mutual fund called an Equity Fund. I haven't touch the topic of mutual fund, yet, but I'm going to mention equity fund here as this is related to stock investing but managed in a different way.

Equity mutual fund is a kind of fund that is managed by professionals. Your investment portfolio is in the hands of professional investors.

Where To Get and Invest Equity Mutual Fund

Most of the time online brokerage offers such services. Talk to your online broker or if you don't have an online broker, yet, look for an online stock broker if they are offering services for mutual fund (I'll be covering mutual fund in the future as this is good investment diversification).

Basically, what an equity mutual fund does when you invest your money in it is, a team of professional investors will invest majority of percentage of your investment will be invested in the stock market. The professional investing team will go through the hassle of selecting a company where the money is going to be invested.

The rest of the money, will be invested in safe investment vehicles like bonds. However, the returns or profits through equity fund is not as big as if you're the one making the actual trading. But, it is much safer specially if you really want to go into investing but don't have much time to focus on it.

On the other hand, equity fund has the highest returns among all forms of mutual funds. Investing through this method is perfectly suited for people who are somewhat conservative but still want a decent returns from their investments.

Buying Stocks Without Going Through A Stock Broker

As I've mentioned on this post, when buying stocks one must go through a stock broker, either online or with the traditional broker. But, there is an exception to that and learning how to buy stocks without a broker is something to be done by experience investors.

A lot of the big boys of stock investing like Warren Buffet won't likely to through the broker in order to buy or sell stocks.

When buying stocks without a broker, an investor will go directly to the company whom he wants to buy share of stocks. This is direct communication between the investor and the company department responsible for handling such transaction. There are no commission fees involve in this type of transaction, unlike if it goes through a broker.

However, if you should opt on this path, you should have a good knowledge of investing, not just the fundamentals but advanced knowledge of how investing works, including the laws which are associated with it. Although, you don't need lawyers to assist you on this, but, it is a smart idea to have one, just in case some things not good may arise.

You need to read every fine print about the policy of the company you're investing in, and understand clearly what you're doing and possible outcomes in case the company goes bankrupt.

This is something that a beginning stock investor should not do. If you are planning of doing this, master first the basics and simple way of investing stocks through online brokers and progress your investing journey towards a more sophisticated and more profitable way of investing.