How To Buy Stocks

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How To Buy Stocks

Buying stocks is great way of investing money and gaining profit over a longer period of time. To make sure you choose the right company to invest in and that your money grows over time, here are the concepts and ideas you should be familiar with.

Before making stock purchases, try to understand the overall concept a bit more. To help oversee the process, even if you are a beginner, think of stocks as any other physical product that you can purchase. Stocks are "the capital raised by a company through the issue and subscription of shares”. By purchasing stocks, you buy pieces of ownership of a company, which can gain value over time.

Understanding the Market

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After familiarizing yourself with the concept of buying stocks, the next step is learning more about the market itself. Just like at any other market, prices constantly change at stock markets, depending on the demand and the availability.

Deciding the Price

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Decide a price plan for yourself. Knowing your own financial situation (savings, salary, any debt you may have) and your limitations will help you select the right amount of investment.

Researching Companies

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Selecting the stocks you want to purchase is probably the most important part of the process, and if you choose wisely, your investment will definitely be profitable. Start researching and choose 5-6 companies that you’d like to learn more about. Keeping a list of the companies will help you a lot in sorting everything out and choosing one at the end.

Keep Up to Date

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Before immediately buying stocks from a company that is currently performing well, we recommend properly researching everything about the company. Past earnings and expected profit and growth over the years, as well as profit margin and financial history. Besides checking these statistics, also compare the company to its competition to get a better idea of your chosen company.

Deciding Your Purchase Plan

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There are two ways you can buy stocks: directly from the company itself or with the help of a broker. If you would like to buy stocks directly from a company, call them for the details and ask for a purchase plan – this way, you can save money on broker fees. Don’t be afraid to ask any questions you may have before buying stocks. It's better to be safe than sorry!

On the other hand, you can also buy stocks via a broker, who will help you choose the right company depending on your own preferences. As the broker will also assist you through the process of purchasing the stocks, it can help you a lot if you are not familiar with buying stocks.

If you pay attention to the details and make sure you choose the right company and price after evaluating your and the company’s financial state, you are set up for a good investment. After purchasing the selected stocks, keep up with the changes and new details to know what to expect in the future.

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