How to Start a Stock Market Business

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Starting Stock Market Business
Starting Stock Market Business (Image: stock market analysis screenshot image by .shock from Fotolia.com)

Stock market business is by far the fastest investment all around the world. Provided you know little bit of economics, understand the opportunities and risks, have enough idle savings to invest, investing in stocks can yield extremely high profits. Many of us are preoccupied with the idea that stock business is a complicated affair. In fact, once you start up the business with good preparations, you’ll find it very comfortable to live with. Here are the steps to start a successful investment in stocks.

Do a little study. You need to understand the business from a beginner’s point of view. Look for books, publications etc meant for starters. The Internet is a big source from where you can start. Understand the market, the business and related terminologies. Sail from easy to hard topics.

Decide on the amount of investment. Stock market is a volatile one. There are profits vs. losses, risks vs. opportunities. In this backdrop you must be able to do the appropriate apportionment of the savings into stock investment.

Decide on the type of investment. Basing on the local or national market, understand whether you want to invest in shares, mutual funds, commodities or other types of stocks.

Choose a broker for you. There are hundreds of broker houses and all of them don’t perform in the same way and give you the same benefits. Talk to agents of different brokers and make a comparative analysis before choosing one. Things like commission rate, margins etc. will be helpful in choosing a broker.

Open an account with the chosen broker. This will be needed for ordering buying/selling of stocks. Submit all the necessary documents required to open the account. Keep money receipt, copy of account opening form and any other contractual papers in safe custody.

Deposit your apportioned cash to the broker account and obtain a money receipt/acknowledgement. Opt for an online transaction system if available.

Analyze the market for some days. Read enough news, follow the market trends and talk to your closest friends and relatives before you place your first buy order.

Start buying and selling of chosen stocks. Keep your buy/sell orders noted and confirm them after the orders are executed. Maintain an online/offline portfolio of all your stocks. As a starter, remember the golden rule of “buying at low, selling at high”.

Keep a close observation on your stocks in your portfolio. Constantly monitor company information like performance, newer ventures, AGM/EGM, dividends etc. Make a habit of watching/reading financial TV programs, news, online articles, websites etc.

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