Already on ArticleSlash?

Forgot your password? Sign Up

The Basics Of Stock Trading For Beginners

Chickie Maxwell

Visitors: 284

The days of hiding money under the mattress gone - people work hard for their money and their money should work for them. Savings accounts will yield interest and so will certificates of deposit, but there is a better way to get a return on money. Stock trading sounds impressive and it can yield impressive results, but it is easier to get started and to understand the stock market than many people realize. When a person buys a stock they are becoming part owner of that company and are entitled to share in the profits. A healthy stock trading portfolio can help a person build wealth without having to work every hour of the day.

The first thing to know about stocks is that there is never such a thing as a guarantee. Stocks are a risk and people can lose money as easily as they make money. For this reason it is absolutely crucial that anyone who plans to trade stocks have a diversified portfolio. Never buy only one kind of stock - no matter how good it looks at the moment. Stock trading in many different companies will help protect investors if a certain stock crashes so that they do not lose all their money.

Investors need to decide what kind of stocks they want to buy - not just what companies. Common stock is the most popular kind of stock trading - it is part-ownership in a company and allows the holder to vote on company matters. Preferred stock is also part-ownership, but it guarantees the holder a fixed dividend, or return on the investment. These shares may be purchased back by the company at any time and usually do not have the same voting rights as common stock.

How an investor trades stocks is a largely personal decision. Many casual investors will choose stocks and monitor them, but rarely trade them. Actually trading stocks on a regular basis means paying close attention to the stock market every day and being an active trader. Essentially, the value of a stock goes up when the company is doing well and goes down when the company is struggling. For instance, if a person buys a $10 stock and the company releases a new product the next day the stock could rise to $20 a share - a $10 profit for the investor with no work required. If that investor bought 20 shares, that is a $200 profit. If the company has to issue a recall and the stock drops to $8, then the investor has lost $2 and must decide whether to sell and accept the loss or to hold onto the stock and hope it rises in the future.

The last to know before investing in stocks is what risks an investor is willing to take. Some people are willing to sacrifice security for the possibility of huge profits, while others would rather have more modest returns but avoid the chance of taking a loss. The basics of the stock market investing can be summed in the popular pithy statement - buy low and sell high.

MyReviewsNow offers information regarding stock trading . To learn more about stock trading , visit our website at .


Article Source:

Rate this Article: 
The Basics Of Stock Trading
Rated 4 / 5
based on 5 votes

Related Articles:

Basics Stock Investment Knowledge For Beginners

by: Ponnac Okwy (June 15, 2008) 

Online Stock Trading For Beginners

by: W. Henry Boyett (July 20, 2008) 

Stock Trading Strategies for Beginners

by: Ved Sharma (October 30, 2012) 
(Finance/Stocks Mutual Funds)

Stock Market For Beginners Your Guide to Stock Market Basics

by: Reginald T. Hobbss (July 20, 2008) 

Stock Market For Beginners: How Much Are you Willing To Pay For Your Trading ..

by: Iyam Seva (April 12, 2010) 

Stock trading courses for beginners?—?ShareGurukul

by: Anwar Ali (February 01, 2019) 
(Reference and Education/College University)

Online Stock Market Trading For Beginners

by: Mark Crisp (April 13, 2008) 

Online Stock Market Trading For Beginners - Learn The Stock Market

by: Nate Damm (April 24, 2008) 

Stock Trading Basics

by: Micheal James (December 26, 2007) 
(Finance/Stocks Mutual Funds)

The Basics Of Stock Trading

by: Tony Spann (May 20, 2007)