Investing in stocks… How to start investing in stocks
How to start investing in stocks?
Investing in stocks is one of the easiest ways available to enter a specific trade without working yourself in it. You may invest in technology companies without having any experience with them, and investing in stocks reaps good profits if you choose the right stock.
If you really want to benefit from the process of investing in stocks, you should realize that this matter is not difficult at all and does not require much experience or hard effort in order to make profits through it, but all you have to do is understand the meaning of investing in stocks well, and follow the steps necessary to implement it. Well and perfectly.
The concept of investing in stocks
Investment in general and in its broad sense, means delaying or postponing consumption for a future period. That is, the investor sacrifices a present certain value for the sake of an uncertain future value. For example: a person who invests $ 1000 in buying the shares of a particular company, through this process, he pays this amount immediately – and this is certain – and his hope is to obtain a certain value in the future that maximizes his wealth.
Meaning of the word share
The word “share” is one of the most frequently used words in the money market and the stock exchange and it refers to a specific part of the capital. The investment process in this part is considered as participation and ownership of a specific part of the company offering shares in the market.
The process of investing in shares and sharing them among clients is carried out through the capital account for the work of a specific project or company, and this amount is divided into a group of equal amounts. Each amount represents a share and is presented on the stock exchange and money market to all investors in order to carry out its subscription process, i.e. buy it. .
Any investor can buy one or more shares in the company, and when he buys a share, he becomes in this case the owner of a specific share of this company, on the basis of which he earns part of the profits and gains and has a right to the assets in the first place.
The person who owns the shares is called shareholders, and the stock group itself is known as shareholder equity.
The goal of investing in stocks, and why are so many investors applying to them?
Although the money market is diversified and there are many types of investments in it, such as:
Investing in government bonds: It is characterized by being low in risk and return, and it needs high liquidity.
Commercial investments of all kinds.
Savings accounts: They are characterized by being low in risk and return, as well as extremely low in liquidity.
Certificates of Deposit: low in risk and return, and medium in ease.
But investing in stocks is the best and safest of them all; This is because any of these types contains many different characteristics from others, and they also differ from each other in the degree of risk and returns that can be obtained from them, and even in liquidity as mentioned above.
Unlike investing in stocks, which is characterized by risk, which depends on the type of investment in the shares itself and the extent of its dependence on the economic field, industry and the need for financing, and the returns are very high and depends on the performance of the company, as for the liquidity it is medium and in the correct sense it changes every period.
Attractive features of the stock investment process
But in order to make your stock investment process ideal and attractive, there are a set of features that you must pay attention to, including:
Converting shares into liquidity:
Any investor who owns a share or a share of the shares in a particular group can convert these shares into liquidity whenever he wants, by offering his share of the shares for sale in the financial market for the listed shares.
The possibility of unlimited height:
Every shareholder investor has a share of the company’s own assets, and a share of its profits and gains are determined according to the amount of shares he owns, and the investor’s share of the profit increases as the profits of the company itself increase, and the more sales and profits the company is able to increase the value of its shares put on the market, This height is absolutely unlimited.
Moving the management process away from ownership:
Any person who has a share in the company is considered one of the real owners of it, and the group of shareholders or owners forms a board of directors, elects and appoints managers, and this board of directors conducts, directs and directs the affairs of the company as well.
Getting regular profit or income:
Although the company’s profits are not considered fixed matters, and therefore it cannot be said that each individual’s share of the profit is fixed as well, the shareholders can get fixed income in the form of a specific percentage of the profits that the company reaps throughout the year and this is considered a dividend per share. .
Not only that, but there are many companies that have their own policy that requires the distribution of fixed profits on shares and on the basis of which an agreed percentage of the company’s profit is paid as a dividend per share as well.
The only factor that causes some people to fear investing in stocks is the element of risk and risk.
When you tend to participate in investing in stocks, you risk all the capital you have, which you can lose all in a moment without even realizing that once the company’s conditions go wrong, which when it is liquidated, you and as a shareholder in it are the last party who can get something after paying off debts The company, employee benefits, etc.
How to start investing in stocks
Realize and understand well the type of equity investment you are making:
Not all people have the same ability to bear the risk, and it is imperative that every person who makes an investment in stocks is aware of the quality, method and method of making this investment, so that he does not suffer losses that he may not be able to bear the consequences of.
There are attackers who tend to invest in high-risk stocks in order to achieve large profits, and on the contrary, we find investors who prefer moderation and choose low-risk stocks even if this means obtaining a medium return.
Pick a stock broker well:
A stock broker is one of the most important people you deal with in the field of investing in stocks. He is the one who helps you in buying and selling shares, providing information related to them, as well as responding to your requests and keeping records of balances in line with your portfolio, and for any service he provides you from these services gets a return Physical, which is a commission that is determined according to the prices of the currency market itself.
There are countries that require that the brokerage process be through banks, such as the Kingdom of Saudi Arabia, and in this case the banks are the ones who get a fee for these services.
Understand the difference between the concept of trading and investing:
Many of the insiders in the field of investing in stocks confuse the idea of trading in stocks and investing in them, the fact that the person who buys a share in order to obtain a profit through the difference in its price incident in a short period is called the name of the trader and achieves his profits by studying the market movement and changing prices In it, and its business is fundamentally very dangerous being speculative.
As for the investor, he is the person who buys the stock and intends to keep it for a long time and considers it his own capital that he wants to grow and earn a steady income from it.
Follow-up of the company’s status and the movement of developments in it:
The successful investor is not satisfied with collecting his percentage from the company’s profits only, but he follows up the market movement as a whole and the state of the company and realizes the factors that contribute to raising or lowering the value of the company’s shares such as alliances and mergers, rumors that revolve around the company … and many more.
The difference between an upward and downward market
The term market fall is the low price of the stock in the money market for a long time. The downturn is not a bad thing for all companies, but it hurts some and benefits others.
When the market falls and the value of the shares of a particular company decreases, this may be good for another company and the value of its shares increases. The downturn period witnesses investors selling their shares for fear of deteriorating conditions further, and in which many companies are exposed to a decrease in profits.
As for the term market rise, it is the opposite case for decline, in which the total value of stocks rises, and this occurs due to many factors, including a positive economic view of the financial market in general, or an increase in corporate profits by amounts that exceed the expected values.
Where to buy stocks
When a person makes the decision to invest in stocks, the first thing he asks and searches for is the places that he can buy through the shares that he invests in. There are two places or two ways to buy shares, namely:
Purchasing through the secondary market:
The secondary market is the money market in which financial instruments offered of all kinds are traded, including stocks. In this market, anyone can buy or even sell shares of a company through dealing with a stock broker who is a person authorized by the market’s regulators and has a license to practice this factor to help investors in Buying and selling stocks.
Purchase through an Initial Public Offering (IPO) “Offering”:
You can buy shares through the initial public offering, known as the underwriting method. Many companies, when they grow and reach a certain degree of growth, become able to be a public company by offering their own shares, and this is either in order to increase their liquidity and get money, or even increase shareholders. In the company.
Rights of the “shareholder” investing in shares
You may find a company with a large number of shareholders, amounting to thousands, as in the case of most public companies, and all of them in this case are owners of the company, but the presence of a large number may impede each of them from exercising his right to manage and hinder the workflow of the company itself.
Accordingly, the management of the company is a separate matter from the shareholders, and the task of management is given to professional managers only, and every shareholder must understand his rights and duties well and act according to them, and the shareholder’s rights are:
Right to vote and vote:
The formation of the company’s board of directors and the taking of the most important administrative decisions depends on the election and voting, and every shareholder has the right to vote according to the number of shares and their share thereof.
Right to attend shareholders ’meetings:
The company holds a meeting attended by all shareholders, which is the general assembly meeting, in which the financial results of the company are discussed, and a set of important decisions are taken, including the appointment of the company’s accountant, members of the board of directors and its chairman.
The right to obtain free shares “dividends”:
Every shareholder has the right to obtain a cash profit as a percentage of the company’s profits or to receive his profit in the form of a free share.
Shareholders have more other rights, including: Getting a profit from liquidating the company after paying debts and paying all dues.
Aspects and steps for choosing the most suitable stock for investment
You have to choose your financial broker wisely. Some stock exchanges allow brokers and some countries have companies for managing financial portfolios and now there are many investment funds. You can choose wisely the financial medium that facilitates your investment decision and has the scientific qualifications and experience in the field of stocks and securities.
Before starting the field of stock investments, you should research and study the stock market and market trends, follow global stock market movements and trading activity, and have knowledge and familiarity with the stock market and types of investment funds.
Choosing stocks, you must be fully aware of their nature and map, and before buying, you should follow up on previous financial reports and any data or information about the company and the sector in general, for example the gold sector, the contracting sector, and so on.
You must have cash available with you that suffices you for a period of six months in the event that the success of the investment program is delayed, while avoiding borrowing money for investment because it is a burden on you.
Select a periodic amount for investment from here, making the fluctuations of the financial market work in your favor because your investment for a limited amount of money at a specific time and for a long period while reducing the average cost per share provides the opportunity to buy more shares in the event of a decrease in the price and a rise in the market, the average price of the share becomes less than the price that You bought it, so you benefit.
Thinking about long-term investment, because the purpose of buying stocks is either savings in the long term. As for the case of speculation in the short term, it will affect your investment in the event that the stock exchange experiences any decline or decline in indices.
Avoid buying stocks in one area, the best way is to diversify into different investments and sectors instead of investing in one sector. If this sector is exposed to any shake-up, you will be exposed to financial loss.
Remember, the greater the expected profit, the greater the potential losses, so be intimate when buying stocks and do not be fooled by the names. You should read the financial report of the stock well and do not let others influence your choices.
Know the rights and obligations that you have, because knowing the laws and regulations will protect you from any unavoidable error.
Everyone who wants to invest in stocks must be careful when choosing the stock in which he seeks to invest, and choose it based on a set of factors, including:
Earning per share
The profit value achieved by the share is considered one of the most important factors that determine its price in the market, and what is meant by the profit of the share are the net profits that the share company achieves after paying the expenses and taxes, so the greater the profits of the company, the greater its value, and thus the value of its shares increases.
It is necessary not to pay attention to the accounting profits of the company only when choosing a share, but the ability of the company to achieve cash flows and returns must be realized. We see companies whose cash flows are very positive even though they are already suffering losses, and this happens to some companies when their profits are affected by a rise Its expenses, and it suffers from losses, although in reality it is making profits and cash returns.
The more the company’s management team is good and professional, starting from the chairman of the board of directors, members of the center and even the executives, the more the company will be able to take decisions that help in its growth and thus its value in the market increases, which helps in increasing the price of its shares.
We have provided you, dear followers of the money art site, a glimpse into what is investing in stocks and how to start investing in stocks and the best ways to invest in stocks, we hope that we have contributed to opening new horizons in front of you, so publish the article on the largest scale, as there may be someone waiting for him to start The way to its success, and the family of the site promises you to provide more, so follow us.
Investing Investing in stocks Steps in investing in stocks Features of the process of investing in stocks How to start investing in stocks
How To Start Investing With $100 | Stock Market For Beginners
For those who are interested in Trading & Investing, I encourage you to join Our Free Trading Group of over 150,000!
Thank you for the support, the best way to reach out to me is through our private discord chat, please DM me.
If you have any suggestions for future videos such as Day Trading, Investing, Stock Market, Real Estate, Car Sales, Robinhood, TD Ameritrade, Crypto & bitcoin, Entrepreneurship, Forex, Online Marketing, Online Sales or fun daily vlogs. Please let me know.
DISCLAIMER: Please note that i do not ask for any information. I always encourage our members to trade ONLY what you understand and never based on anyone’s opinion. My videos are for entertainment purposes only.any questions to message me as i would love to be a part of your success.