Quality stocks, those listed on major exchanges, have proved to be a good investment during the past century, returning more than 10% per year on average even though there have been significant downturns in the market. Simply put stock is equity ownership in a company. The percentage of a company that you own is determined by the number of shares of stock that you own divided by the total number of shares issued by the company, so while owning 500 shares of Apple stock technically makes you Steve Jobs’ boss, he probably still won’t take your phone call or give you a discount on an iPod. If you have a 401K at work, chances are you already own stock. But there are a lot more ways to invest in the stock market and modern conveniences like the Internet make it easier than ever to buy and sell stock market shares.
Things You'll Need
- Access to Investment Research
- Computer with Internet Access
How to Buy & Sell Stock Market Shares
Determine your level of investment experience, your research ability, and your level of confidence in your own ability to make an investment decision. If you must rely on the advice of a professional you will need to engage the services of a full-service broker. If you feel confident in your ability to make an informed decision based on available information you may wish to engage a discount broker. If you enjoy doing your own research you may wish to engage a no frills online broker.
Determine your investment objective: capital preservation, income, growth and income, aggressive growth, or speculation. Discover, through recommendations of investment professionals or through your own research, companies that meet your investment objective.
Determine the price you are willing to pay for the stock of the company you have selected. Instruct your broker to place a Buy order. This order may specify the price you are offering, which may be lower than the stock is trading. This order will be executed if someone is willing to sell their stock at that price. If no sale is made the order will typically be canceled at the end of the day. The order may also be made At The Market and the trade will be made at the price the at which stock is currently trading.
Sell your stock by instructing your broker to place a Sell order. This order can specify a selling price which is higher than the stock is trading. This order will be executed if someone is willing to buy the stock at that price. If no sale is made the order will typically be canceled at the end of the day. You can also instruct your broker to enter a Stop Loss order which will execute if the price of the stock drops below the specified price. The order may also be made At The Market and the trade will be made at the price at which the stock is currently trading.
Tips & Warnings
- You can get a report on any broker by calling the National Association of Securities Dealers at 800-289-9999.
- Stocks are equity instruments and as such may be quite volatile. You may lose some or all of your investment.
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