Ownership of some part of organization’s interest is share and the people who own it are known as shareholders. Acquisition of shares of a corporation doesn’t necessarily mean that the shareholders will get direct control over the business operations. Then some questions arise, what are the steps on buying and selling shares, how its done and how to invest in shares?
The first thing that an investor has to do is learn about stock market and determine what kind of stock is he going to invest in considering the total budget he possesses for the transaction. And then he has to understand important financial terms like: “bid price”, “offer”, “limit order” and so on. It would be better if he invests in mutual funds as it involves less risk and investment is also low. Then investor has to research about the company in which he is going to invest. It is not logical to jump in a pool without measuring its depth. So, it is necessary to analyze the profitability of any corporation he is going to invest in.
After that he will have to develop a strategy and constantly watch the market price fluctuation. And then, in the right time he needs to choose a broker with whom stocks can be purchased and an account needs to opened after that all he needs to do is place an order. Generally, investment should be made in the companies with high profitability since they tend to give good returns.
Selling the acquired shares is an act of logic; great investors like Peter Lynch and Warren buffet did not earn money just because of buying shares at bottom price and selling it at the highest price. Instead, they bought shares at a price and sold it at higher price. An investor should always remember this rule and should not emotions rule his transactions.
Everything is turning online nowadays, starting from banks to shares, buying and selling shares has also been automated. But how to buy and sell shares online? All you have to do is find an online brokerage (make sure it has good customer service), look at the rules and regulations, learn the accounting software of the broker and finally initiate transaction.