Investment ideas take various shapes and ideas. You would need to figure out what works best for you in a given situation.
The modus operandi of investing in stocks
Investment in stocks is not an easy task as you might think. To get the ball rolling you have to invest in a brokerage account. This is a very competitive industry and if you are lucky you can strike a lucrative deal. For example it could be no commission on the first 10 transactions are strategies put forth by the brokerage companies. You would need to find a stock broker that is suitable for you. Just take into consideration that it might take a few days to keep your account funded. Just fill out the application process and begin the process of funding.
Then the second thing that you might have to do is to formulate a list of stocks that you are keen to invest in. This does pose considerable challenge from an investment point of view. There is a logic that says that you should invest in what you are aware but in reality it is not a simple task. Just try to figure out whether the company is profitable and what the future would look for the company. It is better to subscribe to news advisories as this would provide better clarity from a judgement point of view. There are some different styles of investing that are
Swing trading
You go on to hold it longer than a day trading position. This would be considerably different from a buy stock before or after earnings and hold position that you could go on to hold for even years. You hoard the assets for a considerable period of time so as to make profits. Profits you can attain by short selling or purchase of an asset.
Value investing
An investor is of the notion that market reacts to both bad and good news. They should be on the lookout for stocks which they feel market has undervalued and when price is deflated go on to buying them.
Growth investing
For a growth investor they go on to invest in a company that shows above average growth. The focus is more on capital appreciation. In a way you can relate it to value investing.
The masters have a clear cut idea on how to play the game. Whatever their opponents throw to them, they are able to tackle it with ease. In investing it would be no different as just you need to have a concrete plan to make it big.
Figure out where to put in your hard earned money
Even for the most experienced investor deciding where to put in your hard earned money is a challenge. Nobody is aware on how the market is going to be tomorrow. But if you analyse the trends of the last 50 years, real estate, gold and bonds are considered safe sectors to invest your money. In case if you are thinking to invest and have a time frame of a few years, then stock market is the best place to invest.
If you have made a decision to make an investment in stock market, then this is the time to get started. Once the brokerage account is in place you can start off with exchange related funds. In a single transaction it is a better way to buy a basket of products. The key is to pick up stocks that stand up to the needs of the market. If you are investing for the first time then this is the best place to start off.
Research ETFS
The ETFS has gone on to become extremely popular for a novice who is trying to make their way on to the market. The ETFS relate to specific industries or currencies.
Choice of sectors
The choice of stocks has to be modelled on specific criteria. Rely on a screener that would further segregate stocks on the basis of dividend, market cap etc.
Be informed
By subscribing to newsletters and reading magazines you are well informed on the up to date happenings of the stock market.
The different type of investments in the market
Bonds
Considered to be debt instruments where investors provide loan to an entity and earn interest on the same. The borrower borrows the fund for variable or fixed period of time.
Large and small cap stocks
The large cap stocks advocate a more conservative approach. Here an investor advocates a safe approach. There is a steady pay out of dividend pretty much the case with blue chip companies.
On the other side small cap stocks are risk takers. Companies witness a huge potential for growth. But they do not get their fair value and more research is suggested. To arrive at a conclusive decision it requires investors to have sufficient time from a research point of view.
Penny stocks
Because of their higher levels of liquidity they are high risk stocks. Because of their low price buyers fall into the trap of buying such stocks. For a small amount of capital you own a lot of shares.
Clearly outline which are the stocks you need to buy
Be it any stock sector the ultimate aim is to invest in stocks that show greater price appreciation. Pretty much on the same lines you need to pay attention to sectors and multiple frame works should be incorporated in order to figure out how a stock withstands the test of time. When you are selecting stocks a couple of things have to be kept in mind
Liquidity
Do not commit the mistake of investing in a stock that has less volume. What would be the situation if quick liquidation is needed? Selling it a decent price would be an impossible task.
Price
Invest in stocks that are t $ 5. Shying away from a stock because of a higher price is not a good idea. On the other hand do not buy a stock because of its low price.
