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Investment In Shares For Beginners

Posted: 12 Feb 2011 01:33 PM PST


The reason why the stock market is created is to allow business owners to raise money for business growth and expansion plans. A company goes public and issues shares on the stock market through an initial public offering (IPO). The company creates a specific amount of shares, say 1,000,000 and anyone that buys a share of that company will own 1/1,000,000 of that company.
Most people got into trading stocks and shares through a brokerage firm. If you are doing to do share trading on a frequent basis, you need to understand the brokerage fees on stock purchase and selling. You can register for an online brokerage account and check out their rates while doing so. Note that this does mean not you will need a personal broker to help you do share trading for beginners since this will incur additional fees while your trade volume probably does not warrant such services yet.


Why Start Beginner Stock Market Investing

Posted: 12 Feb 2011 01:28 PM PST

I only know of one reason people started to learn buying stocks and shares for beginners, and that is to make maximum return on their investment money that is sitting around in the bank accounts. Before you even open a new brokerage account online, start by gaining some basic understanding on the type of industry or companies you prefer to invest in and then look out and do further research on three or four companies whose flagship product or services have attracted your attention on. That means checking on the financial background of these companies and their higher management profiles. Find out the symbols of these companies such that you can look at their previous trading information and start tracking these stock performances. You should probably detect some patterns after a few weeks.

Generally, it is better to match investment profiles to certain industries when you start dabbling in beginner stock market investing. Some understanding of your personality and the reason to invest your money helps here. For example, some people prefer to buy and hold the stocks since this allows them to commit lesser time and energy to track prices or do share trading for beginners actively. If this is so, look for companies with long term investment potential where you believe they will grow bigger over time with solid management and products or servcies. On the other hand, many people learn stocks and shares for beginners in less than a month and started to do day trading in order to make marginal profits frequently on the patterns of price fluctuations.


Learning About Share Buying For Beginners

Posted: 12 Feb 2011 01:27 PM PST

Picking which stocks and shares to buy for beginners can be nerve wrecking but it need no be so. Buying stocks does not equate to gambling where you can lose everything in one round. Taking the time to learn proper way to evaluate stocks and shares is more important than rushing in on a hot tip without knowing anything.

If you are not sure about the performance of a particular company, resist the urge to jump in their the rest of your peers and wait for a better time to buy shares. Learning to buy stocks and shares for beginners can be very time consuming initially but the time spent on educating yourself will pay off many times in the long run. Once you find your own winning patterns in identifying good stocks to trade in, you will start to see how rewarding beginner stock market investing really is.

For your first purchase while learning stocks and shares for beginners should be from a company you know well enough. Check whether it meets the following four criteria as a rough gauge on whether it is a good stock buy or not. Firstly, if the shares are trading at $100 now, I suggest looking at another company since it is too expensive for a newbie.
Check out the Year's Move indicator which tells you how much has the prices grown over the last year. This is a good measure of the company's management goals for the current year.
Next is the Dividend Yield which states the percentage value of each share that the company pays to shareholders. If you are into day trading, this is probably not so important for you although those who wanted to learn buying stocks for long term investment and income will be. Some companies do not pay dividends, although these will still be attractive if they show higher price growth. This is because money that is not paid out to shareholders can be used to expand operations and improve profits for the company, which makes it more valuable.
Finally, the famous Price/Earnings (P/E) ratio is computed by dividing the share price by how much the company has earned in this financial year. A lower Price/Earnings ratio indicates that the company's stock is currently valued at a good discount although this figures can be very dpepdent on the type of industry. A high P/E ratio means that investors are projecting that the company has a lot of growth potential although the actual earnings are still lagging behind.


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