How to buy shares of a company: The simplest and easiest guide to buying shares
Buying stocks has changed a lot since the advent of the Internet. There are now more options than ever, and it can be overwhelming not knowing where to start. Luckily, we’ve got you covered! Here we explain step by step how to buy shares of a company and what to look for in a share to buy.
What is an action?
A share is a contractual agreement between a person and a company. A person or broker buys a number of shares from a company, and in exchange for this investment, the company promises to pay a dividend in the future. Both you and the company can agree on how many shares you will buy and when.
What is a dividend?
A dividend is a type of payment that a company gives to its shareholders. Instead of paying you cash or stock, the company will pay you a certain amount of cash each quarter. Cash usually takes the form of a fixed payment. For example, the same company may pay $10,000 a year to all shareholders for a $1 share.
Buying shares is exactly what it sounds like: you buy a part of a company, for example, Apple (AAPL). The important thing to remember is that a stock is different from a bond, and should not be confused with a mutual fund stock.
Here are the basic steps you need to follow to get started: 1. First, you need to do an analysis of the stock market. This will help you with your investment strategy and will also give you a good understanding of how much you are earning on your investment.
Then, the most important decision is to choose a Broker that allows you to buy shares and operate with a DEMO account, such as Naga, which in addition to being a broker, is a trading platform.
where you can learn directly from professional traders and copy their trades. We explain what it consists of here: What Copy Trading consists of
Use DEMO account
It is a great tool to be able to test the real market, but without risking money. If your broker allows it, carry out all the operations in demo for a while, and use it to learn and test strategies.
What to consider when buying a stock
When you buy a stock, the first thing you should consider is how much risk you are willing to take and how much money you have to invest. Some of the most common risks are Volatility: How volatile will the stock be? Does it depend on the stock market? Will stocks be affected by macroeconomic events like a recession? Is it a company with great projections for the future? What type of trader are you, and how do you like to trade, long term or short?
The technology industry is almost the backbone of the economy. With the great advances in Artificial Intelligence, blockchain, and big data, the influence of technology is set to continue to grow, making the entire world a more connected place. But in general, companies will continue to make profits regardless of the sector they are in. You just have to decide how and when to start.