Investing in shares

Investing in shares

One of the best ways to build a solid financial asset that is profitable is to invest in shares of stock. Investing in stocks usually means buying a mutual fund or a specific action listed. You can also buy shares in a private company, but this is often left to more experienced investors looking to finance new businesses.

First, decide on the type of the investment account that you want. The accounts most widely used are those offered by banks, brokerage firms, service, and discount brokers. If you use your bank as intermediary, it has the advantage of being able to deal with people you know. Banks generally charge quite high commissions. A full brokerage service will provide research information and other services at rather high costs. For savvy investors, the broker is the most popular choice because of the fees payable are relatively low to execute stock transactions.

Which way?

Which way?

Develop an investment strategy that suits your financial goals. When you invest in stocks, the main objective would be to create more income. If this is the case, you must identify actions that are stable and at low risk but also that pay high dividends. On the other hand, if you want your portfolio of stocks to grow in value, the search for strong growth-oriented companies is the best strategy. For most investors, it is better to focus on one or two sectors. In this way, you can follow the developments and market trends. If you set multiple goals then it will be more difficult for you to accomplish them all, thus increases the risks taken.

Know the company you are going for. Go to the Investor Relations section of the company’s web site and read more news about it. You can also order a copy of the annual report of the company. Look for information about its history (the last 3 or 5 years), its current status and its future plans and prospects. Finally, compare the company with others operating in the same industry in order to detect strengths and weaknesses. Having done that, you can evaluate the pros and cons of each company before you make you choices.

Diversify your purchases and invest in different companies. No matter how attractive a company may be, there is always some risk when you invest in shares. By buying several titles, you can minimize the risks and increase the chances of making more profit out of them.

By +Nikos Kontorigas

About Nikos Kontorigas

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