Last Updated on 26/02/2022 by Deepak Singla
Here’s an up-to-date, practical guide to discovering how to invest in stocks in a few steps, perfect for novice investors looking to enter the stock market.
Always full of opportunities, investing in stocks has become an investment solution suitable even for beginners and those who do not have large sums. Throughout the guide, you will discover all the main tricks to follow to optimize this investment.
How to invest in stocks
Starting to invest in stocks can be a very good idea to allocate part of our savings. Many large investors recommend this option when investing money, thanks to the excellent performance of the stock market throughout its history. Of course, for the investment to be profitable it is necessary to take some simple precautions, such as trading CFDs, choosing a commission-free broker and focusing on the long term. It’s also recommended to invest in top UK stocks to buy.
What are stocks?
First of all, we must have a clear idea of the concept of ‘action’. A share represents a part of the capital of the company, so the purchase of share contracts automatically makes us owners of the company in question. Therefore, we will become an active part of the company, with the opportunity to participate in shareholders’ meetings and give an opinion on the main topics on the agenda. However, since the existence of online trading, there is also another way to invest in shares: using contracts for difference (CFDs) and speculating on the performance of the shares, without buying the property. Beyond the chosen modality, it is convenient to make the concept of action very clear. To delve into this topic it is useful to study some books on the subject. Before investing our money in any business, we need to know the market in detail.
Decide how much capital to invest
Let’s be clear: in the past, investment activity was reserved only for rich people or wealthy entrepreneurs. Securities accounts, execution fees, consulting fees, and more are just a few of the costs required to start betting on the best stocks. To date, the situation has radically changed thanks to the arrival of CFD brokers on the market. How much money do you need to invest in stocks? Many trading platforms require a deposit of between $ 100 and $ 200, which is very low. With a starting capital of $ 100 and leverage of 1: 5, it will be possible to speculate on Stock CFDs and win on the difference in price.
How to choose the best Stock Broker?
Investing in stocks involves the use of a broker that will act as an intermediary between us and the financial market. Therefore, it will be necessary to choose a regulated broker to buy and sell shares through the platform. How to choose the best broker for us? Simple, just request the free Demo account and try the platform with virtual capital. We also suggest you try 3 or 4 platforms at the same time, to find out which one best suits our needs. What aspects to consider when choosing a good broker? Without a doubt, you should pay attention to the following:
Regular license
Low spreads
H24 Customer Support
The type of investment
Another very important aspect that we must take into account when investing in stocks: what type of investment do we want to adopt? The options are different and are also based on the development of the sector, which today allows investment in ways that were inaccessible until a few years ago. Do we want to buy and sell shares? Then CFD contracts are for us: safe, easy to use and without fixed costs. Through CFDs, it will be possible to open a bullish or bearish position and win based on the number of Pips moved, regardless of whether it goes up or down. This option is the most used to invest in stocks, both by beginners and by the more experienced. Developing an investment strategy will help us to be profitable when trading CFD stocks.
