How to Buy Stock

Video Transcript

"Hello, my name is Mark Griffith. This is a very brief and very simple introduction into how to buy stocks. Or in other words how to buy shares in companies. As a form of investment. First of all, take your time. Simply because you've decided to do this doesn't mean you need to leap in. Take your time and do some research. And what you need to do is you need to decide what you want, that's always part of the research, and the other part of the research is what the companies are like that you are buying shares in. So, do you want to make money, do you want to make money by buying and selling very quickly, do you want to hold, do you want to buy in hold shares, do you want to make percentage gains, do you want to make cash gains. These are all different things to factor into your trading system. One of the things you'll need to do is to decide when you sell things. Some of the time you'll make your loss. You might buy something at one hundred, sell it at ninety-six, and obviously you've made a loss, four cents, four dollars, whatever the difference is. And in that case you need to decide when you're going to take the loss and when you're going to take the profit. It doesn't matter if you have buy something at one hundred and it goes up to two hundred and fifty, and it goes back down to one hundred, you haven't made any money. So you actually have to sell when the price is high and buy when the price is low. And this sounds like the simplest thing in the world but it isn't. So you need to decide on your strategy, work on this, and work out when you're going to do it, how you're going to do it, and take your time, don't rush. The other thing is of course researching the individual shares. Researching different companies. Finding out which kinds of companies do risky things, which kind of companies do safe things, have they grown in the past, are they having trouble, and remember, if they're having trouble it might mean they're cheap now and are going to go up. If they've done well in the past two years it might mean that they're expensive now and they're going to go down. So on one level, it looks very, very simple, on another level nothing is ever as simple as it seems. So, you also need a brokerage and look for a brokerage that is registered with a regulatory organization. For example in the United States, like the Stock Exchange Commission. These organizations inspect brokerages, they make sure they do things honestly and you should look at the charges. You'll have to pay the broker to do this for you. And the broker will take charges and the charges differ, there are different limits, so you need to research all that. So there's three things to find out about. One is the companies themselves. The other is the terms of the account that you're going to open with a broker. Without that you can't buy and sell the shares. And the third thing is your own strategy. Why are you going to buy, why are you going to sell and most importantly, when. Once you've done all those things, you can start paper trading which is a kind of imaginary trading, where you look at things and you say well, I would buy it today at this price and you wait a few days and you see if you've made imaginary money or lost imaginary money, and then gradually go in with small amounts of money, testing the waters, getting yourself used to the feeling of buying shares. Good luck."