How to Trade in Stocks & Shares

Stocks are one of the main options available for investors, together with bonds, real estate, and bank deposits

Stocks, also known as shares, are one of the main options available for investors, together with bonds, real estate, and bank deposits. They represent ownership rights to a company, allowing investors to part-own firms they would never buy outright.

It is a well-known fact that in the long run stock prices always rise, mirroring population and GDP growth. However, because new companies emerge while old ones wither away, choosing the right stocks to invest in could be tricky.

Instructions

1. Find a stock broker. Your stock broker should give you access to as wide variety of stocks as possible and at the same time should offer competitive stock quotes and commission rates

2. Define your strategy. Choose which sector you would like to buy into. Determine your investment horizon (how long you will hold a stock). Review the risks involved, do not "put all your eggs in one basket", diversify you portfolio.

3. Find the stocks that fit your strategy. Analyze the financial position of the companies whose stocks you are interested to buy. Read expert opinions about the stocks, press releases and other relevant information.

4. Carry out your strategy, buying and selling the stocks you chose. Remember to review and change your strategy as market conditions change.

References

• Investopedia: Stocks Basics: How Stocks Trade