WHAT YOU NEED TO KNOW BEFORE YOU INVEST IN THE STOCK MARKET

mt kilimanjaroMoney market or what is referred to as the stock market  is the place where trading of financial items such as the  stock or share and bonds takes place. companies and governments sell  shares and bond to raise capital for expansion purposes and development projects with the promise of paying at a later date and the buyer (you) own part of that company.Depending on  the type  of shareS you bought you  may have the right to vote in the matters of the company  .Today trading of shares is fast and simple as you can do acquire or dispose shares online from any part of the globe.

however there are those country that hasn’t yet digitalized the process and people have to use the central depository agent,therefore  the first thing you need to do  is open a cds account,with a cda(central depository agent) regulated by the central bank of you country. You only need a bank account and your identity card or passport and maybe a passport photo.It’s in this account where all you transactions will be  transferred electronically whenever you purchase or sell your shares

the risk involved in the buying of shares is high as if you don’t do a proper research you could lose all your investment  before you put your money, you need to check the company itself management visions  background and prospects.this infor is freely available on the companies website or alternatively research analyst firms including your cda will have that information but this might come at a fee

You should look out for the historical and current financial positions well as the  future projections of the company in terms of growth,earnings per share and the competition.A  good company to invest in should have a solid plan  and high earnings and profit after taxes and after preference shares has been paid out.Market also should  not volatile

The time as to when you should invest  or even sell your share must be the right time to gain maximum returns and avoiding any risks of losing your investments.Most people buy stocks when the market seem to be thriving and sell when  the economy is constrained this should be guided by the proper research on the the economic change but one thing i have learned over extensive reading on stock markets those people who buy are are patient enough and don’t pull out quickly those who buy when others are selling  reap high benefits

Another fundamental,  of long term investments  pays back rather handsomely compared to short term investment so invest now for money that you will need 10 years later

The prices in the stock market just like any other market are determined by the supply and demand this however is not the  only price determinant. when people want to buy more of that share the prices will go up and vice versa. always look beyond  thats what makes wealthiest people .

 

 

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