Investing in corporate shares is one of the most convenient and reliable ways to invest and increase funds. But for investments in securities to be justified, it is necessary to have a good understanding of where and how shares are sold and bought.
A few decades ago, shares of companies existed in physical paper form. Having bought them, you could simply store the purchased securities at home or in a bank safe. But with the development of the Internet and electronic trading, the existence of paper stocks has become a thing of the past, now all information about them and their owners is stored only in electronic form.
Who controls the buying and selling of shares
Direct implementation of transactions for the purchase and sale of shares is carried out by brokerage companies that have permission for this type of activity. It is brokers who keep registers of shareholders of companies, making the necessary changes in it when shares are transferred from one owner to another.
Thus, one cannot simply sell the existing shares to someone, this operation is carried out only through an authorized broker. It should be noted that the choice of a broker is a very important point. Both the safety of your funds and the amount of commission charged by the broker for the purchase and sale transaction depends on this.
How to trade securities
First of all, it is necessary to conclude a brokerage agreement with the selected broker. You can then buy or sell any stocks you are interested in. But stock trading itself can take place in two ways. In the first, you tell the broker what transaction you want to make, and the broker carries out it - that is, buys or sells the number of certain shares you specified. However, in practice, the second option is becoming more widespread - you yourself carry out a transaction via the Internet, from an electronic trading terminal provided by a broker.
Trading over the Internet has a number of advantages. First of all, you will be able to buy and sell stocks in seconds at any time of the day or night - except on weekends when no trading is taking place. In addition, the trading terminal allows you to conduct an effective technical analysis of the dynamics of the market value of the shares you are interested in. This, in turn, allows you to make a decision to buy or sell securities.
Placement of shares
It is also possible that you decide to issue shares of your company yourself. Do you have to go to a broker? No, if the placement of shares is closed, among the members of the labor collective. In this case, you have the right to issue the required number of shares yourself and independently maintain the register of shareholders, pay dividends, etc.
It's another matter if your company is actively developing, and you expect to attract investment and make money on the growth of the share price. In this case, a public offering is necessary, so you will have to look for a broker who will bring your company's shares to the market.
It is important to understand that an initial public offering must be very well prepared. They should know about the company, its shares should be of interest to investors. Only in this case, after the placement of shares on the stock exchange, one can expect an increase in their value and the possibility of a profitable sale.
Financial risk when trading stocks
Trading in securities can bring both high profits and significant losses. Therefore, it is necessary to have a very good understanding of which stocks and when to invest.
It is very important to follow the rules of money management - money management. For example, half of the funds can be invested in blue chips - reliable shares of leading companies that bring, if not the largest, but stable income. Half of the remaining funds can be invested in medium-risk stocks. The last part of the money can be invested in risky assets that can bring both high profits and losses.
