Posted on 18 September 2012. Tags: how to buy stock
Learning how to buy stock makes an easy way to begin investing, but you must understand that the financial ocean teems with sharks and piranhas that want to get fatter by picking your bones clean. Investors can buy stocks from full-service brokers, discount brokers, and online brokers. The first option carries the highest fees for making your trades, but these experts offer their financial advice as part of their services. Discount brokers might offer occasional tips, and the least expensive brokers offer only generic advice.
Starting out with an online broker cuts the administrative costs of trading, this could eat up the investment capital of small traders. Online research allows anyone to get information about investing, but so many opportunities exist that it becomes difficult to learn about all of them. Consider specializing in a particular area such as energy, farm commodities, entertainment, or IT technology. You can quickly learn enough to begin making some sound investing decisions based on your own independent research. You might want to diversify and use a full-service broker for part of your money, but save your special research for cost-effective online trades.
Remember that specific, unsolicited tips could be scams. Investors often buy cheap stocks and then promote them to inexperienced investors. You buy the artificially inflated stock, and the investor dumps his or her shares and makes a profit. You get left holding worthless shares because you followed a hot tip. Never invest money you cannot afford to lose because all investments carry some risk. No single strategy takes the place of doing research on each company, so remember what your mom said about finishing your homework before you start playing how to buy stock.
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