Today, investing money in securities, the main purpose of which is passive income, is in great demand. The difficulty lies in the ignorance by many people of the full range of actions aimed at making a profit in this area. A part of the population interested in this earnings option does not know how to buy shares.
What is the income from securities
There are several options for the above type of earnings, namely:
1. income from the difference in prices for the purchase and sale of shares;
2. profits from the temporary borrowing of these securities from stock brokers with their subsequent sale at a better rate and return purchase at a reduced quotation;
3. direct earnings in the form of dividends, that is, part of the profit that is paid to shareholders.
How and where to buy stocks
It is always available to purchase the securities in question through brokerage services. Using this service, one can freely use all trading floors existing in the global context, in particular, the stock markets of countries such as the USA, Europe, China, India, Australia, Brazil. There, it becomes possible to carry out the whole range of commercial activities with existing securities.
To start bidding, a number of procedures are required, in particular:
1. Open the appropriate account with the desired broker.
2. Deposit a certain amount of money on it.
3. Select the appropriate tariff plan that provides access to the desired trading platform.
4. Highlight the desired stock.
5. Check with the current rate on them.
6. Leave a request for purchase.
Is it possible to highlight the advantages and disadvantages of this option for earning on the securities in question
About how to buy shares, little has become known, and therefore it is worth moving on to the moment that reveals the positive and negative aspects of investing in them.
The facts supporting the positive outcome of investing in these securities are:
1. The presence of significant potential for good returns.
2. Passivity of earnings, that is, there is no need for physical labor.
3. The possibility of a trial investment of small amounts.
4. Certificate of ownership of part of the enterprise whose shares were acquired.
5. The possibility of earning on their speculation.
Evidence of the negative aspect of investing in stocks are:
1. A sufficiently high risk level if there is no theoretical and practical knowledge regarding the exchange methodology.
2. The presence of a brokerage commission, independent of the outcome of the auction.
What are the possible negative aspects that may accompany this type of earnings
If a decision has already been made on how to buy shares on the stock exchange, it remains only to become familiar with the possible risks and ways to minimize them.
The primary task that must be solved before the start of trading is the mastery of practical skills in predicting possible cases of adverse outcome.
Factors affecting the stock price are:
1. The direct proportion of the value of these securities to the generated profits of the respective company. Nevertheless, with the identity of some economic indicators, the stock price may differ significantly. The popularity of the securities in question is increasing in relation to the availability of technical standards, corporate management and the observance of shareholder rights, as well as the company's reputation.
2. The news line during the bidding can both harm the course and significantly contribute.
3. Statistics of the activities of the respective enterprise, forming certain opinions of potential investors.
4. Dependence of Russian stock markets on the level of world stock indexes.
What stock market beginners should know
The main asset on the well-known trading floors are various securities, a number of questions follow from this, one of which is the question of how to buy shares in a private person.
To answer it, it is necessary to learn the fact that the largest exchanges do not have such rights that would allow them to sell securities to individuals without a special registration procedure. The reason for introducing such restrictions is both the security aspect and the monitoring of transactions.
There is an opportunity to become a fully independent private investor, of course, purely theoretically, by first creating a legal entity in your name and registering it on the stock exchange. This procedure involves the payment of an initial contribution, which is equivalent to the average annual budget of a small enterprise. Therefore, this option is not always appropriate. Therefore, many citizens turn to the services of an intermediary who can explain in detail how an individual can buy shares on acceptable terms.
Who are brokers
Exchange intermediaries are usually firms that are professionally engaged in stock trading. Thus, these can be large companies that legally sell and buy shares.
Brokers act as intermediaries between three exchange participants, in particular:
1. The stock market itself, which is the guarantor of all kinds of transactions.
2. Issuing companies, that is, firms issuing shares.
3. Investors conducting speculative transactions.
So, the answer to the previously asked question about how to buy shares for ordinary citizens will be the conclusion of a contract with a brokerage company.
This option is appropriate due to the lack of special registration and payment of the down payment. This becomes possible due to the purchase and sale of securities by the broker on behalf of his clients.
For the same reason, attracting stock intermediaries will also help to solve the problem, the essence of which is how to buy shares in a private person.
It will be useful to note that securities of Russian enterprises bought and sold on specialized exchanges are issued without documentary evidence. That is, the new owner is not provided with any certificate of purchase. However, all operations with shares are lawful with respect to Russian law. From the moment of their alienation, information about the new owner is entered into the corresponding register of shareholders of the enterprise whose securities were acquired. Accordingly, there is an electronic record confirming the ownership of certain shares.
Availability of purchase of Gazprom shares
Quite often you can hear the question of how to buy shares of a Russian energy company. In particular, the famous gas company. Most often they are purchased or sold through a professional stock market participant. Usually this kind of service is provided by investment companies and commercial banks.
Another option for acquiring the securities in question, which allows answering the question of how to buy shares of a company in the oil and gas sector, is to receive them at a branch of Gazprombank.
This method is associated with a number of advantages and disadvantages, namely:
- a positive aspect is manifested in the absence of payment of commissions to intermediaries;
- the negative side pours out in the presence of the internal rate of the relevant bank to buy or sell shares.
It is attractive for those who want to own a profitable asset, but do not want to bid.
How to buy foreign stocks
A very difficult situation is observed in the moment regarding the acquisition of securities by Russian investors. The option of buying shares in foreign companies is not at all easier, on the contrary.
There are still several ways how to buy shares of foreign companies, more precisely:
1. Obtaining by a future investor a license issued by a national bank authorizing investment abroad. It is required to determine in advance in which shares investments will be made and how much money can be spent on this. It will be necessary to collect the necessary package of documents for each transaction separately and forward it for consideration to the head office of the national bank. Then you have to wait for an answer that will be ready in no less than 30 days. This option is appropriate for those who want to invest a significant amount in stocks and are not going to put them up for sale, at least in the near future.
2. Trading via the Internet on a foreign exchange. A foreign broker is involved here. Further, the scheme is the same as when buying shares through Russian intermediaries. It is important to know that this method is not legal under Russian law.
3. Attracting over the Internet foreign companies that will play on a foreign exchange on behalf of a client. In this case, you will need to install their trading terminal on the customer’s computer and deposit funds into the account. This option is fraught with great risks and is also not legal.
The choice of how to buy shares of foreign companies, only to the investors themselves.
How to avoid mistakes during bidding
There are endless ways to play effectively on the exchange, in particular:
1. Formation of investment portfolios, allowing to compensate for unsuccessful investments through successful ones.
2. The use of special strategies to minimize risks.
3. The use of orders that allow timely timely responses to market conditions, etc.
Thus, using modern technology, you can participate in tenders remotely, that is, online, due to uninterrupted access to the stock exchange via the Internet. It remains only to correctly predict one or another behavior of the stock price, which is quite simple if you develop analytical thinking.
How to choose a broker
Under Russian law, individuals can purchase shares on the stock exchange exclusively through an intermediary and only. It is worth taking seriously the choice of a broker.
The main winning features of exchange intermediaries are:
- the presence of a maximum reliability rating;
- providing the client with free market analytics through daily electronic mailing or telephone consultation;
- acceptable level of commission, etc.
Stock liquidity levels
There are three echelons of shares:
1. The first level includes blue chips. Issuers belonging to this echelon constitute a group of domestic companies with assets of over 20 billion US dollars. Thus, they occupy a significant place in this industry. An example is such large-scale companies as: Sberbank, Lukoil, VTB, Gazprom and others. Their shares are available during the trading session. This echelon is characterized by stable profitability and impressive competitiveness.
2. The second level is represented by companies that have assets not exceeding 10 billion US dollars, in particular: Aeroflot, Rostelecom, Baltika, etc. Investments in these shares are always appropriate, in view of their possible transfer to the first echelon. The main advantage is the stability of the growth of quotations.
3. The third tier includes companies whose securities are distinguished by their price attractiveness and potential profit potential for them. This includes companies that have entered the Russian market relatively recently and whose assets reach 100 thousand US dollars. This echelon is characterized by significant risks combined with minimal liquidity, but a potential income growth potential.
Entering the stock market is not so easy, but you can always buy stocks.