After so many months without leaving home and without much leisure to do, many people have managed to save more than ever. But how to get profitability? There are many different ways to generate more money with money, one of them is by acquiring company shares. But beware: Just as we can make money in the stock market, we can also lose it. In order to help future investors start this financial journey, we are going to explain in this article how to buy stocks.
First of all it is highly advisable invest only that money that we will not need in the short term, so as not to lose everything if our investments do not go well. In addition, his thing would be to start with small amounts to learn and little by little to increase our heritage. If you want to learn how to buy stocks and invest your money, read on.
What does it take to buy stocks?
Let's first talk about what we need to buy stocks. The most important thing is obviously enough money to invest. An intermediary is also essential, either through a bank or a broker, to be able to access the stock market. Another aspect to keep in mind is that investing takes time to conduct studies, research companies and calculate hypothetical profits and losses. Yes, we must always take into account the amount of money that we can lose in a transaction to consider the risks that this entails. It is an essential process to know how to buy shares.
Most common mistakes
Although each person has their own way and strategy to invest, there are several very common errors that many investors commit. So that you learn how to buy shares without making these mistakes, we are going to comment on some of them:
- Price chase: When the value of a company's stock continues to rise, many people tend to enter. This is a very common mistake, since it is most likely that these investors will arrive late and end up suffering the market correction, which means the drop in that value.
- Do not use stoploss: When we speak of "stoploss" we refer to a limit price of loss that we have established in a stock. In other words: It is the maximum money we are willing to lose with that transaction. Once the price reaches the stop we have placed, the stock will sell automatically. It is important to use the stoploss, as it protects us from greater losses.
- Indefinite losses: The worst mistake of all is keeping losses for an indefinite period of time. It happens to many investors that they want to keep their shares in a company even if they do not stop losing money with them. Why do they do it? Because they hope that it will recover and that it will end up generating a significant sum of money, or they simply hope to recover the investment. These types of situations end up ruining many people.
- Don't diversify: The best thing to do is diversify our portfolio. When it is made up of several investments, it will not depend on a single security, considerably reducing the risk of losing everything.
What are the steps to invest in stocks?
Before starting to invest in stocks or in any other option offered by the stock market, it is best to follow a series of steps that we are going to comment on below. These without fundamentals to learn how to buy stocks.
- Save money: It is essential to save until you have enough money to invest and, at the same time, have a mattress in case our attempts go wrong. For this reason, it is not advisable to invest 100% of our savings, since we could lose everything.
- Account: Obviously, we need to open an account at a bank, a stockbroker or broker. These will give us access to the stock market.
- Simulation platforms: Before getting into the world of the stock market, we should practice some time with simulation platforms. Through them we can carry out transactions of all kinds and get an idea of how they work and how to handle the actions. Generally, brokers include these platforms in their web pages or applications.
- Analysis: The stock market is not like the lottery. It is not about investing in large companies or buying shares because a friend or television has suggested it to us. We must be very aware of where we are putting our money. To do this, doing a meticulous analysis of the company before buying shares is of vital importance. What is its real value? How much do you earn per year? Do the products you offer have a future? Investing in a company is not a decision that we should take lightly, it requires a prior study.
- Finally we have acquire the shares: To do this we will calculate the amount of money that we are willing to invest and based on this we will get more or less shares. However, it is best not to bet everything on a single company, but to diversify our portfolio. This will help us to take less risk of losing everything in the event that the investment goes bad.
Where can you buy stocks?
If we want to invest in the stock market, which also includes buying shares, we generally have two options:
- Through the bank.
- Through a broker.
We all have a bank account, but in order to invest or buy company shares, normally banks offer us a specific account for this, Well, you have to meet certain requirements that will depend on the entity. Doing transactions on the stock market through banks is usually the safest option, but sometimes also more expensive due to commissions.
The broker, also called a stock broker, is an economic operator intermediary that facilitates buying and selling in the stock market and whose remuneration is based on the collection of commissions. They are usually more comfortable to use than banks and are cheaper. However, there are many brokers that do not really interact with the market, that is to say: If we buy shares through them, we are not buying real shares in the market. For this reason, we must inform ourselves before which ones are trustworthy.
I hope this article has helped you know how to buy stocks and what to consider.