4 of 4

Write now Article Tools

Before I begin a word of warning: the Stock Market is not for everyone. Don't think that it is your ticket to riches, because more often than not it will be your one way to rags. So, if you just woke up this morning and decide that you were going to be a trader, I suggest you think again.

You cannot decide to be a stock trader, you have to educate yourself first, otherwise it is just gambling. Las Vegas is for Gamblers, the Stock Market is for investors.

Now that we clear, let us begin.

First of all, what does it mean to invest in the Stock Market?

Well, the Stock Market is by essence a private or public market where equities and derivatives are traded at an agreed price. These securities ( broad term used to describe all types of debt that a company is putting up for sale ) are listed on a stock exchange. There are many different types of securities, but for the sake of simplicity, I will only concentrate on equity securities (common stock).

So, when you decide to invest in a company, you buy a certain amount of its shares. By doing so you are taking a stake into this company and as such, you become entitle to a proportion of its profits, it is called dividends.

But, a company is not obliged legally to actually pay dividends to its share holders. Many companies lately in view of the financial crisis have decided not to pay up, in order to save the cash. However, in normal times it does make good sense to let investors profit, otherwise why would they even bother. How do you buy into companies?

Again there are many ways in which you can invest into the Stock Market. The most direct and most popular nowadays is via the internet.
Many companies allow private investors to open a brokerage account, giving them a platform to buy and sell on the equity market. You can virtually open one with putting no money in it.

I would advise you to do a little research before settling on one particular company, as commissions vary greatly from one to the other. You will need as well to make sure that when you decide to place a trade, the order will be carried out instantly ( a matter of seconds ), to avoid losing your edge. But , before you decide to do your own share buying and selling, you will need to familiarize yourself with the process of how it's done and how brokerage accounts function.

Trust me it is not as easy as it might seem to place a trade on line. First of all, you need to understand what type of account you have with the brokerage firm. Mostly, those companies do not

• 1
• 2
• next page >>

Add your voice

Know something about How to start investing in the stock market?
We want to hear your view. Write now!