The stock market has often been mistaken to be an elitist playing field where only the crème of society can play. But it’s actually something far simpler than that. Investing in the stock market is not “rocket science” and while it has its own challenges, you can easily get started. It doesn’t matter whether you have any experience in finance or not, starting with a small investment and building on as you learn the ropes can be a great experience.
So, how do you actually invest in the stock market?
Well, here are 4 easy steps to get you started:
Get A Brokerage Account
You will need to have a brokerage account for you to invest in the stock market. You cannot buy shares without a broker. The broker acts as the intermediary between you and the market. He or she will purchase shares on your behalf based on what you want to invest in. The brokerage firm will charge a fee that is usually 2% of the total transaction value. There are many brokerage firms today and the rule of thumb is to go with an experienced provider who has a proven track record of transparency and integrity in stock market transactions.
Pick The Stocks You Want
There are so many stocks you can buy but you’ll need to be careful. Buying a stock is not some guess work and while there is some level of risk involved, you can still do your research and pick stocks that will make you money. What you need to understand is that when you are buying stocks in a given company, you are becoming an owner even if it’s in a small capacity. In that case, start by buying stocks you are passionate about in sectors that you understand and are closer to your heart.
Decide How Many Shares You Want To Buy
The value of your portfolio once you invest in the stock market will be determined by the total number of shares you have and the value per share. It’s not important to have too many stocks. What really matters is to hold on to a stock portfolio that offers some value. As a beginner, you’d probably get started with a small investment. This won’t get you many shares in the market but it’s still a great start. You can increase your share numbers as you move forward as a trader or investor.
Make The Order
The final step in becoming a stock owner is to actually make the purchase. At this stage, you should have already decided. It’s time to come through. Once you are sure which sectors you want to invest in, select the companies that are more promising. Decide the number of shares you want for the money you have and make the call to the broker to make the purchase.
Buying shares in any stock market is not that hard. What really takes time and effort is knowing which stocks to buy. The four steps above should help you get started with stock investment.