How to buy shares for an individual in 3 steps
Stocks are an excellent investment tool that allows you to make good money, achieve your goals, and create an effective source of passive income.
Shares are sold on specialized exchanges. For example, in the Russian Federation there are two major stock exchanges for this purpose – St. Petersburg and Moscow. At the first stage, they organize trading in securities of foreign companies. Russian stocks, government, corporate, regional bonds, precious metals, and currencies are traded on the Moscow Exchange.
All trades are strictly monitored and carefully recorded on any exchange. Auctions are held according to a clear schedule.
Any company can place its shares on the stock exchange to attract third-party funds for the development of its projects. Investors invest their funds in securities to make money on them. By purchasing shares, investors become owners of a part of the business of those enterprises whose shares they buy.
The work of the exchange is controlled by the regulator, in Russia this is handled by the Central Bank.
How do I start trading?
For beginners on the stock market, it seems that the procedure for buying shares is possible only for a select few. However, there is nothing complicated about it. First, you need to set aside a certain amount of time to find out which shares can be bought by an individual and how to make it as profitable as possible for yourself.
If you have a desire to become a successful trader, you should not immediately start wasting money. Buying shares without a broker is a risky procedure, so you need to go through the main stages of preparation:
- acquire basic knowledge from trusted sources, first of all, understand the principles of the stock exchange, the nuances of technical analysis, study quotes and other financial instruments;
- choose the market where you will work.If you are considering a foreign language, then pay attention to the American one;
- find a good experienced broker and register an account.Without an intermediary, it is better not to start buying shares, in addition, individuals do not have direct access to the stock exchange;
- to buy shares officially and start working with them, you will need an appropriate program.Your chosen broker can offer a trading terminal;
- try to buy the factory’s shares on a trial basis. For this purpose, some exchanges have demo versions of trading that help you complete the transaction in test mode;
- carefully choose the object for investment, you need to buy shares of Russian enterprises or foreign companies that inspire confidence and their risk of bankruptcy is minimal;
- to purchase the selected shares, deposit a certain amount of money to your brokerage account.This is available through online terminals or through bank cash registers.Once the money is credited to your account, you can start trading.
This is a common plan of action, but some aspects should be taken into account.
How do I get the necessary knowledge?
Today, information about trading on the stock market is available to everyone, you can get it almost everywhere: specialized literature, forums, articles, video lessons, thematic seminars. The ideal option is to combine different training options.
First of all, experts recommend beginners to master technical analysis of the market. Without this knowledge, you will not be able to buy shares of the company and trade on the stock exchange. By mastering these basics, many mistakes can be avoided.
How to choose an investment object?
To determine an effective company for investment, experienced traders conduct a mandatory market analysis. Technical analysis involves studying charts of price movements in the market, searching for patterns and being able to use these data to determine the time of purchase or sale of securities. It doesn’t matter which way the market moves. You can make a profit either by reducing the price or by increasing it.
Fundamental analysis does not rely on charts, the main goal of a trader in this case is to find a firm that has certain financial guarantees and is developing dynamically. Investors operating on the basis of fundamental analysis expect long-term profits.
What is the basis for choosing an exchange?
Shares can be bought and sold on the stock exchange, which is a trading platform and provides optimal conditions for the circulation of any securities.
Approximately two hundred exchanges are known all over the world, including the largest ones in Moscow and St. Petersburg. If you have a brokerage account, you can trade securities on both platforms.
The procedure for buying shares. How transactions are made
Securities can be purchased on the exchange in the following ways::
- online using a terminal provided by the broker.To do this, you will need to install special software on your personal computer, configuring it to meet all the requirements;
- by phone.After signing the contract, the brokerage company will provide you with voice passwords and phone numbers for communication.The investor can make transactions by phone at any time;
- using a specialized web interface.The functionality of this tool is simpler than the terminal.
How to buy a block of shares, where to track their price – these questions are most often of concern to beginners.
All Russian shares are listed on the Moscow Exchange’s website. Price changes are reflected in real time, and minor delays are allowed. If an investor makes a lot of trades every day, it will be more convenient to track quotes using a trading terminal.
If you want to invest in securities and trade on the stock exchange, but do not have the desire or opportunity to learn how to do this, you can use the offers of trust management. The essence of this method is that a specialized firm selects companies for buying their shares and trading strategies. It will act on the stock market on your behalf and in your best interests.
In this case, the purchase of shares by an individual involves signing an agreement with the management company and depositing the necessary funds to the brokerage account. Next, the company will send you daily reports that allow you to track the movement of your assets. For these services, you will pay a percentage of the profit of your shares, agreed in advance.
Among the regularly occurring questions, you can also hear: How do I know when to buy company shares? No one will tell you that for sure. If you plan to invest for a long period of time, then you can buy shares at any time when you have free money. If their quotes fall soon, the market will compensate for the losses in years to come.
The time to sell securities in your portfolio depends on the investment goals and the profit received by the company. You have the right to sell your shares if their price has increased, and earn the amount in the form of the difference between the purchase and sale. You can also leave them on for a long time.
It is not necessary to sell shares during a market downturn, although many novice traders are immediately ready to sell them when the prices of purchased shares fall. The best strategy is to make a long-term profit and understand that sooner or later the market will come back.
How many shares can I buy? Their number depends on the amount you are willing to spend. Many people are also concerned about the question of whether it is possible to buy 1 share? This is quite real. Most successful investors started by buying 1-2 shares in their portfolio.
Tips for beginners
If you are just starting to think about how much you can buy shares for and how to invest in them, listen to the advice of experienced traders:
- don’t invest all your money in buying one company’s securities.Leave some of the funds for investments with a low percentage of income, but with high reliability;
- create your portfolio from securities of different companies, diversification is mandatory;
- if you want to invest for a short period of time, you will not get much profit, you need to invest in the long term;
- when you don’t have enough experience and knowledge to build a portfolio, contact the appropriate ETFs.
The ideal way to get a good profit is not to sell immediately at the first price drops, but to hold for a long time.