How to Buy Your First Share ? : Everyone gets nervous before buying their First Stock. The main attraction of trading is that people feel they can make quick money. “Trading requires a lot of discipline.” One thing you should keep in mind that profit depends on risk management.
As a beginner, you have so many questions related to How to buy your first share ? And it creates confusion in your mind. In this post you will find basic tips that will help you to clear your confusion and easily you can make decisions.
1. Enhance your knowledge
Very Few beings really seek knowledge in this world. Knowledge is power occupy your mind. To buy your first share you need to know that you can select your first stock by doing analysis. It can be done by 1. Technical Analysis & 2. Fundamental Analysis.
- Technical Analysis: To Perform technical analysis you need to learn it. RAPID TIPS provides different Technical Analysis blogs from basic level to advance level. To know more about technical analysis, you can read our post on Technical Analysis.
- Fundamental Analysis: This Analysis consist of the basic qualitative and quantitative information that underlie an organization or a company’s financial and economic position.
2. Understand Your Profile
Investing in the stock market include different risk and return. When it comes to investing first thing you should know about your personal risk profile for investing. It depends on two factors.
- Risk Capacity – How much you can take risk per financial position.
- Risk Attitude – The risk one is ready to take
Knowing the risk profile helps to prepare yourself mentally for accepting stop loss. The purpose behind understanding your profile is to protect your capital from huge loss.
3. Stay Updated with current Scenario
As an investor, it is important to stay connected with the current market situation. Every day read and watching news is the best option to updated with the market it will help you to understand the current market condition and more about different industry and their performance. It is one type of basic analysis that creates the basic steps to start the investment.
4. Searching for Companies
The next Step in the Stock Picking Process involves finding the companies from different sector in which you are interested. And as a beginner, it is done by simple ways – it doesn’t include any rocket science…!!
- Steps for company selection:
- Select the sector that contribute more to the economy of the country.
- After that select one company from that particular sector.
- To select the company, you need to check few things – i.e. contribution of the Industry to that particular sector, Performance of the company based on past records, Management of the company.
- All this information about the company is easily available on the different websites.
- Technical analysis is another way to select the company by analyzing the charts of the company – it is also easily available online. But, to understand technical analysis you need proper knowledge.
- Fundamental + Technical analysis gives more powerful result to select the stock.
These are some basic steps that will help you to choose your first share.
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