Buying stock

Buying stock requires one to go through a broker and most importantly you have to choose if you want to buy the stock online or through a face to face broker

After choosing your broker you open an account and place an order. The broker gets a small commission ordinarily in cents per share. Online brokers charge less commission since they carry out this process electronically.

The order you make is dependent on the stock you choose to invest in. There are many factors that determine what stock to buy. You can buy a stock for speculative reasons. This means you buy a stock at low price and sell it when the prices go up. You may also buy a stock and hold on to it to get the dividends after the financial year.

Stock speculation may be profitable but require good stock evaluation skills and timing to ensure you sell at a time when the stock price has gone up from the purchase price. On the other hand holding a stock for dividends depends on the overall performance of the company for the financial period you have held it.

When investing in stocks its best to have a portfolio of different companies shares to diversify risks. Better still approach a financial adviser to help you with investment ideas.

Buying stock is just but one option to investing.

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