How To Buy Stocks – Getting Into The Stock Market

How to Buy Stocks – Getting Into The Stock Market

Today numerous people from various financial backgrounds are buying stocks. Buying stocks is a very complicated process which is more often than not financially rewarding. But, not all people know how to buy stocks efficiently, and when you go in without the proper knowledge, you may get burnt. Here are three steps which will help you to invest your money in the most  profitable stocks. Keep in mind that purchasing stocks is a great way to move towards retirement. I recently published a post on that that you can read here. If you aren’t interested in reading, you’re in luck! Here is a great video by Trading 101 on how you can buy stocks.

1.Research the markets well to find diamonds in the rough

Find a company with  good profit margins, fair equity returns, low debt to equity ratio and stable growth. The easiest way to find a company that is worth your investment is through the specialized websites or newspapers like the Wall Street Journal, Stockchase.com or Investor’s Business Daily. Through these specialized websites you will find the least volatile and most profitable companies. Most importantly these publications will give you resources through which you will be able to gain knowledge about the process of buying stocks like shares of stocks, exchanges, supply and demand of stocks, stock prices and the opinion of the investment community of the stock.

It’s important that you get familiar with the terminology of stock trading. Research about terms such as ask price, bid price, a market order and sell price. This will enable you to be more skilled in your decision making. If you find a company whose sales and profits are increasing you will be able to sell your stocks after a certain period of time with a profit. After this research is completed you will have the knowledge and ability to research the financial indicators of the company whose stocks you are planning to buy.

2.Find stocks with the right financial indicators

Since you will be familiar with the terminology and financial indicators of stocks, you will be able to choose stocks whose financial indicators will be suitable and profitable. Buy stocks from a company that has a steady profit margin and an increasing growth. But, besides profit margins and growth there are other equally important indicators such as the company’s debt, its equity returns or its debt – to – equity ratio. Although the profit percentage is very important for both the company and for investors, what is most important for someone who wants to buy their stocks is the company’s return on equity. If a certain company invests the received money from shareholders to increase its profit, the shareholders will also increase theirs. But, what is perhaps even more important is how much debt a company has and in which way it is managing it.

You can analyze whether a company has sustainable levels of debt through the debt – to – equity ratio. Chose a company with a lower debt – to – equity percentage and then compare it with other companies numbers. After you analyze all these components analyze the price – to – earnings ratio. This ratio will give you a comprehensive representation of the annual gain you will receive per stock. Buy stocks from a company whose stock price is cheap in relation to the earnings you will receive.

3.Buy the stocks directly or through a suitable broker

Certain companies provide direct stock acquisition without a broker. This is a very fitting approach for someone who isn’t buying a lot of stocks. You will save not only time but also the commissions that come with using a broker. You can find these companies online if that approach is the easiest for your investment plans. It is also important to be careful about the fees of a stock. Try to find companies that don’t have fees or companies whose fees are lower. The dividends you will receive will depend on the profit of the company, and what that company chooses to issue. I’ve got a great review for you lined up here with my broker of choice. Head to this review of Questrade if you’re interested in learning more.

If you can’t or don’t want to buy the stocks directly from the company, find a suitable broker. If you are buying lots of stocks it may be worth it to pay a fee to a brokerage firm for peace of mind and convenience. There are lots of discount brokers available too which will lessen your commissions and increase your returns.

 

Beginners Guide To Investing In Stocks

Beginners Guide To Investing In Stocks

 

investing in stocks

A stock is a share or piece of ownership of a particular company. When you are a stockholder, it only means you have a voice to the company decision making. You can participate in the selection of board members. And you can share the company profits, also called dividends.

If you get to know the dynamics , investing in stock market can be the safest and best way to amass wealth. You can buy and sell stocks at a profit or you can just enjoy the dividends. This is the ultimate advantage of stocks.

 

How to get started in stocks 

For you to get started on the stock exchange, you need to keep yourself updated with the latest information. Read the financial articles and watch the business news regularly. You will be armed with up to date information to assist you in making intelligent choices.

Generally, the stocks/shares raise when the company is making profits and when there are more buyers than sellers. However, if the company is making losses and/or the number of sellers outweighs that of buyers then the value of the stock will drop.

You should also be aware of the economic and political factors. If there is unrest the stock market usually performs dismally. This could be the right time to buy shares. But you should be careful enough to project how long the unrest will last.

 

How to invest in stocks 

You need to analyze the various companies out there. Hunt for the one you would like to invest in. You might require some expert advice here. You can consult a stockbroker. Also, reading some reviews about these companies would come in handy.

After you get the company of interest, it is now time for you to invest. How much money do you want to invest and for how long? Long-time investments in stocks are more profitable. When you are beginning, start small with amounts you can afford losing and still sort bills.

 

Also as a beginner do not rush into high-risk stock market. You can start first with low-risk stock investments such as government bond and ETFs. However, if you have a good stock broker you should not shy off from locking horns with the riskier stock market. The returns are bigger.

 

Finally, you should learn never to carry your eggs in one basket. Diversify your investment. If one company does not perform well, you can reap profits from another one. But they cannot fail all of them at once. If you need any help, feel free to get a hold of me via my contact page.

 

How Early Can you Retire?

How Early Can you Retire?

retire

Introduction

Someone rightly said that “Retiring is inviting a world of new adventures ” but the question is; are you fully prepared to undertake this leisurely adventure? Or is it a phrase taken vaguely? We will seek to answer that question using certain points explained below.

Age of Retirement

One factor to put into consideration is the age at which you intend to retire. In real life, many people foresee that they will retire quicker than they actually do and uncertain issues, such as health constraints or changes in workplace (Re-structuring, demotion etc.), tend to come on the way and hence resulting in an early retirement.

And remember the earlier you seem to retire, the bigger bank balance you will need to last throughout the life after retirement. It’s very crucial to prepare for unseen events that could force you to bid farewell to your work life.

Life Expectancy

It is generally accepted that you can’t predict how long you will live, but there are a few factors that may give you strong hints and with which you can plan your days.

You should consider your family background in terms of health and life expectancy—how long people in your family have lived. This can be seen in how long your ancestors have lived and the ailments that they have suffered from if any. Also, your own health comes into question here.

After that, you would have to take into account the fact that life spans are becoming longer with the developments in medical sciences. Nowadays, there are chances that a good number of people will live up to 100 years or even longer. Now calculate the amount that you need to survive through these years

Health care needed in the future

Another major thing to consider is the amount of money involved in health care. These days, this cost is rising at a much faster pace than the general inflation, and very few employers are generous enough to offer health benefits to the retiring people.

Care in the long-term is another factor, and this expense could surely dip into your savings account and even lead to filing for bankruptcy if the need for care is elongated and constant. Therefore, factoring the costs involved in health care after you leave your work is very important.

Your current lifestyle

Now what you should be thinking about while thinking of retirement is lifestyle that you want for the rest of your life. Would you travel frequently or you want to get involved in community service? Would you sign up for an expensive club membership or is there any hobby that you want to take up? Your honest answer to these questions can aid you in deciding what surplus costs your dream retirement will require.

Many enthusiastic people expect that they would like to work part-time in retirement. However, if this is your intention you will still need some funds to enhance your retirement lifestyle.

Inflation

If you have analyzed and accounted for every certainty while constructing a savings fund, then forget this vital factor as you will have a good buffer to head into retirement. Inflation lowers the value of your savings from year to year, heavily decreasing your purchasing power over the years. It is crucial and vital for your savings to be on pace with inflation.

And the Sum-up of all the above

After considering all these factors, you should have a mirror image of how much you need to earn and save for your retirement.

But after you calculate your retirement savings fund and apply all the factors to how much savings you have currently, you will be able to analyze how much is required from your end to save each year and reach your savings goal. The most important thing is to make a goal and then strategize how that will help you to reach it.

Remember, the earlier you initiate savings and invest to reach your goal, the better you will realize your dream retirement.

Have a happy retirement ahead!