Buying and selling stocks can be a tricky thing to understand for first timers. For a lot of us, our only context are those movies where people in suits are screaming at each other down the telephone as they twiddle biros. Some of us only have vague memories of relatives buying us one share in the local football club as a birthday present when we were too young to really understand what that meant. The truth of the matter is that trading stocks is far more accessible and comprehensible than either of these two extremes. You don’t need slicked back hair and dangerously high blood pressure levels to earn some money investing on the stock market, and your portfolio can be significantly more diverse than that single investment your gran made for you.
It also does not have to be something that breaks the bank. It’s perfectly possible to earn money on the stock market with a sensible investment that yields big returns. You just have to know what you’re doing and make the right choices at the right time. Simple, right? There is always going to be an element of unpredictability when you’re trading stocks, but here are a few tips to help you get started.
Make Sure You Find The Right Share Dealing Platform
Let’s start with the basics. If you want to buy, sell or trade stocks, then you need to be using a share dealing platform that you can rely on. This will not only be your port of call for making these transactions, but it will also be the place for you to monitor the performance of your stocks and identify opportunities for new investments.
The process of getting started is actually fairly simple. You need to choose your online stockbroker, then you open an account, deposit some funds, and then pick the company or companies that you want to invest in. The challenge is finding a broker or share dealing platform that meets your needs while giving you the best value. Platforms will generally charge you fees, but there are some that won’t. A platform like eToro, for example, has added benefits such as a Copy Trading feature that allows you to mimic the behaviour of a veteran trader. To find out more about the best share dealing platforms UK, read a detailed breakdown at Buy Shares.
Know What Kind Of Investor You Want To Be
Traditionally speaking, there are two types of people who buy and sell stocks. The first is the passive investor. This is the kind of person who does their research to find safe bets, the kind of sensible investment that should keep climbing in value at a steady, although probably not remarkable, rate and which requires the least amount of active involvement from them. The kind of stock that you check in on every now and then to make sure that nothing major has happened, and then leave to carry on appreciating slowly.
The second kind of investor is the active kind. This is someone who wants to look for those volatile stocks, the ones that can rise sharply in value at a moment’s notice. This is the area where you can see your investment yield some incredible returns, but it also comes with a huge amount of risk. These kinds of stocks can plummet as quickly as they can climb. If you are going to take this route, then you need to make sure that you can be ready to move at a moment’s notice. Some stocks, like Bitcoin for example, are inherently volatile. You can’t take this route without knowing that you can dedicate a huge amount of time and energy to it.
Don’t Put All Your Eggs In One Basket
If you are serious about making some money from buying and selling stocks, then you need to think about the kind of portfolio you are putting together. If you think that you have found a great company that is going in the right direction, it can be tempting to take the “all-in” approach. That’s fine if it pays off, but it’s also a sure-fire way to lose everything that you’ve put in. Diversifying your stock portfolio may take more time and effort but it is also the best way for you to protect yourself from the kinds of losses that you can’t bounce back from. We have all seen how unpredictable the market can be over the last year and more. So many businesses have faced massive losses and been forced to close during the pandemic. Everything from high street stores to bars and restaurants have taken a massive hit. The fact of the matter is that there are no guarantees. If you’re trading on a budget and you want to know that you can weather out any oncoming storm, then keep looking for more investments that you can make. Hedging your bets is no bad thing.
Founder Dinis Guarda
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