Stock Market Stock Market Basics

Steps To Take When Investing In Stocks

Steps To Take When Investing In Stocks

If you are new to the stocks and shares market then you may think that it is a complicated field to navigate. This isn’t the case at all, it can be really simple but may take some research to increase your knowledge to start investing in stocks. The easiest way to set up as an investor is to sign up with an online stockbroker. Once you have done this, you can start buying stocks within a matter of minutes.

Do Your Research

If you are serious about investing in stocks then you must do your research. If you base your interests and research on companies you have already had dealings with then you will already have some knowledge about what they do and what the company is about. Remember, don’t let the numbers and gyrations faze you, these are just a formality. 

When you look into the companies you want to invest in be sure to check the company’s annual report, this will give you a general idea of how the company is doing. You should also take into account the letter to the shareholders from management.

One thing to be aware of with stocks is you have to invest because you want to be a part of the company not just because their numbers are good or you want to watch the stocks rise. Most of what you need will be on the broker’s website, all the tools and other necessary information. 

Decide How Many Shares To Purchase

When you start your investment journey it is really important to start small, as small as possible. This helps you with a little introduction into the world of stocks and shares. You could purchase one single share and see how it goes. The worst thing you can do is go big when you first start off, it may pay off but the chances are minimal. If starting small goes well for you then next time you can increase what you pay out. 

The good thing about investing in companies is that you can be a shareholder with any amount of money. This means you can invest in the bigger companies such as amazon who are well known for having four figure share prices.

Optimize Your Portfolio

It may take a while to build your investment portfolio but over time you can add lots of different companies to it. It is important to remember that even the best investors go through rough patches and losses. If this happens, brush it off and start fresh. You can’t control the fluctuations but you can control how much you win and lose. 

When you are starting up with your portfolio in the stock market you will need to make sure everything is legal and above board. If you are investing in stocks and anything related to finance then you will need to apply for an lei number. This is a legal requirement and it means there will always be a trail attached to you and what you invest in. 

Can I Sell My Stocks?

Finally, yes of course you can sell them. However, as an investor who want to start investing in stocks you must know that it isn’t worth touching them for at least five years.

This is due to something called stock market volatility and it means that in those five years the market may fall before it rises. If in those five years you need the extra cash and you think it is a good time to sell then you can do this, just be aware of any capital gains taxes that are attached to the sale.