Stock market is an unpredictable place but at the same time it can provide returns at such a rate that is impossible for any other investment sector. So the charm of the market is very high and it is expected to remain in the position for a long time. To make a memorable entry in the market, practical share guide is very necessary.
The investor should know the market as much as he knows himself and then only, a successful stock market trader can replace the novice investor of today. Supply and demand is behind each and every business. Share market also runs under the same theory. In the market someone is selling his or her shares and someone is buying the same.
Thus the balance between demand and supply is maintained. Actually the stock exchange is a kind of platform where the provider and the purchaser of shares, can come together. There was a time when these physical exchanges provided the best services to the investors, but now it is a backdated concept.
The online process has replaced the concept of physical exchange. Whatever be the type of stock exchange, a share guide is a must for share trading. There is a particular process, which should be followed to start the process of stock trading through the online methods.
The interested investor needs to open an account for the purpose with any broker.
Then the investor places the order for his choice of shares and the broking houses generally finds those shares for the person. At the same time if a person wants to sell his shares, the brokers find out the right purchasers. The amount, which is needed for buying and which comes from selling the shares, use the particular account mentioned above. The broking house gets their commission fixed for the purpose.
Before investing in the stock market the investors should follow some stock market guide to understand the market and its risks. It is the responsibility of the investor to manage the risks and to mend them in his or her own way. There are several strategies through which the losses can be managed and the profits can be increased. Firstly, the investor should invest in different stocks to divide the risks. If someone is investing in a single stock, it can produce huge profits or huge losses. The diversified investment is surely not going to provide the huge profits like the former, but it definitely reduces the risk factor from the investor’s portfolio.
The investor should always remain conscious about the tax factor. One should try to keep the shares in possession for at least 12 months then only it can produce some tax benefits. There are certain shares, which can provide tax benefit from the very beginning and the investor may think of these shares too. Among these types of share, there are the 401k and 403B, IRAs and many more. One should also take care about the external factors like political steadiness and wars before investing and it would be wise to check the company profile of the share provider before investing in shares.
Last Updated on : 26th June 2013