Investing in Stocks for beginners

One of the things that most people look into when investment comes to mind is the stock exchange. However a lot of them are scared to try because they don't really know much about it which is understandable because not all schools actually include it in their curriculum. So in this post we will focus on stocks and how it works. It's really simple that I don't have to make this post complicated and technical.

Stock Defined

A stock is a share in the ownership of a company. It's normally called as a share or equity, they just mean the same thing. It represents a claim on the company's earnings and assets. So yes, If you buy a stock from a company, you technically own a part of the company even if it's very small. The more stock you acquire, the greater your ownership stake in the company becomes.

As a shareholder, you are entitled to any voting rights attached to the stock but it doesn't mean that you have a say in how the business is runned. Let's say you are Dell shareholder, you just can't call Michael Dell and tell him how he should be doing things. It's usually the billionaire investors who make all the decisions.

How to earn in Stocks

Simple, If you chose to invest with company X and purchased let's say a thousand shares for a dollar each. The after a couple of days you check the price again and it went up to 2 dollars, then instantly you earn $1,000 if you decide to sell them, just like that. If you invest in the right time with the right company, you can look to quit your job but it's really unpredictable especially for beginners. But like in any other business, it's a risk you have to take so make sure it's calculated.

Where to buy stocks

You'll need to look for a broker if you want to buy and sell stocks. There are three distinct kind of brokers.

• full-service brokers
• discount brokers
• online brokers

Trading with the full service brokers may be costly as they offer stock ideas and advice. They back it up with reports from their research department. Discounters normally do less of it as experts' tips are literally all over the web.

Nowadays almost everybody can actually afford to invest in the stock market with the explosion of the online brokers. Here's a link of a list of sites of brokers in case you're thinking to get more information from the brokers themselves.

http://www.investorguide.com/links-dir-brokerlist.html

Just in case you decide to sign on with a full-service broker, make sure that you know the company's track record. To get a report on any broker, call the National Association of Securities Dealers at 800-289-9999. You may also visit the brokers website.