A Stock Investing Crash Course - 4 Essential Tips

You don’t need a formal stock investing course to benefit from the handsome returns that stock investing can lead to. Even people without professional education in business or finance have been extremely successful in unlocking value from this opportunity. Although investing in the stock market offers great potential, there is a significant downside to it as well. While stock market investments are always open to risks based on investment decisions, lack of knowledge about the stock-investing world can also lead to losses. For new and budding investors there are a few basic aspects that they should know about the stock market:

Stock Market Basics

The stock market is a place where the shares of publicly traded companies are bought and sold. A public company is a company that is allowed to sell its shares to the public. When you buy the shares of any public company, it makes you a part owner of the company and you are entitled to some return on the amount of investment you have made, as long as the company is making a profit. Generally, if a company is more profitable than others, then its share price is also expected to be higher. It is possible to lose all your invested capital in the event that the stock price plummets.

How to Buy and Sell Stocks

You need a brokerage account to be able to buy or sell stocks on the stock market. There are a lot of companies both physical, and on the internet that will open a brokerage account for you. You can access most brokers through their user-friendly online interface and send them buying/selling instructions over the net for prompt execution of orders.

Using Full Service Brokers

A full service broker will provide a lot of services to their clients. Their services can include research and advice, tax tips, retirement planning and more. Since all of these things come with a price tag, normally the commissions that a full service broker will charge per trade will be higher than those charged by discount brokers. They will act as your financial advisors and be more hands-on in planning your investments for you.

Using Discount Brokers

Discount brokers will simply buy or sell your stocks for you. The commission that a discount broker will charge is lower than a full service broker because a discount broker will not give you the service that a full service broker will give you. Most discount brokers may only offer an internet based service and not have a physical office location

The stock market is extremely unpredictable and extremely vulnerable to all the financial, political and social conditions surrounding it. So if one is to really make money in the stock market, then they themselves need to know what they are doing and can make educated predictions of the share prices. It is always recommended to diversify your portfolio to avoid putting all your eggs in one basket.

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