Buy Shares

By Revy Anandya Azhary

How to Buy Shares – A Complete Beginner’s Guide
Picking stocks is a lot like buying a car. It’s no different when you pick stocks.

The first thing you need before you buy shares in a company is a stock trading account. If it’s your first time, I recommend using a discount broker. This type of broker will process your buy and sell orders, and little else. Chances are if you have an account there they can help you start a share trading account easily and at a low cost.

For your first purchase, you want to buy what you know. Look at 3 companies that you like – companies you have bought things from or know people at. Pick up a newspaper and write these four things down:

• Price- If the shares are $500 a piece, you might want to skip this one for now.
• Year’s Move (YM) - This is how much the share grew in value last year, and a fairly good indication of what the company will try to beat this year.
• Dividend Yield (DY) - This is a percentage of the value of each share that the company pays to shareholders each year. Some shares don’t pay dividends, but make up for it with more growth
• Price/Earnings (PE) - This is simply the price of the share divided by how much the company made in this financial year. Basically a low Price/Earnings ratio means that the company’s stock is valued about right for how much money the company is making.
  

If the ratio is high it means that the company has a lot of projected growth, but little actual profits so far. Go to the company’s website, and click on “Investor Relations”. Picking stocks is about more than knowing the company. Now your buy case: This is an argument for and against buying the shares. What’s happening in the world that could affect the company’s ability to make money

Lastly, before you buy shares, ask people. Ask someone who works for the company or ask an investment advisor, even if you have to pay them. Remember, buying shares is not gambling if you know the rules.

Stocks and Shares – Tips For Investing Wisely

Even with the present difficulties in the stock market, buying stocks and shares remains one of the most profitable ways for private individuals to invest their money. If a share buyer is to have a chance of avoiding such bad investments, a number of factors must be considered before purchase.

The first is to determine why the shares in question are being bought. Are the shares being bought to provide an income? If so, the level of income desired must be determined and the past performance of the shares in question examined to check if such an income level is probable or even possible.

Once the reason for buying shares has been determined, it is essential that potential stock purchases be researched comprehensively and time taken to consider the impact of purchase. What is the company’s financial history? Are any external factors influencing the share price, such as impending government legislation or imminent changes to the supply of raw materials (for instance the increasing price of oil and gas and its effect on energy companies)? There are many sources of information for research into companies and their shares.

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