Q1: These questions and answers will be
much beneficial on how to buy stocks on line.
When is the best time to buy, hold, or sell
a stock?
A: There are a thousand factors here. As a
novice, look for investment advice sources you trust while you expand your
knowledge. A detailed look at the year-by-year performance and reports of the
company is a good place to start learning.
Q2: What is the actual process for
purchasing shares?
A: Almost all stocks are purchased through
a stockbroker. This can range from an online broker that follows your
instructions, to a personal financial planner who meets in person to plan your
investment. The first option is cheap; the second option is more effective.
Q3: How do I buy shares online? Are there
associated risks?
A: Search for an "online broker."
This service will handle the transaction, but offer little to no advice. This
can be risky if you don't have any stock experience, but as long as you read
the terms carefully you can avoid problems with the broker itself.
Q4: People talk about buying stocks,
equity, or mutual funds. What's the difference?
A: An
equity is a general term for ownership in a company, so "shares of
stock" and "equity shares" are the same thing. A mutual fund is
a collection of shares you can invest in with one purchase, which is a
lower-risk tactic than betting your money on one company.
Q5: How do I invest in an exchange-traded
fund?
A: Just like shares, most ETFs are
purchased through a stockbroker. Although diversified, they are riskier than
mutual funds, and the management fees can make them unprofitable for a small
investor.
Q6: How do I find the unit cost of a
company's product?
A: The unit cost, or amount the company
spends to sell one unit of product, may be listed in the company's quarterly
report. A company that sells products with a low fixed cost can reduce the unit
cost as it grows through economies of scale.
Q7: How do I look up a share price?
A: A quick online search for "stock
prices" will lead you to many free stock lookup databases.
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