If you are keen to try and improve your overall financial situation, then one of the things you might want to consider is investing in stocks. Even if you don’t think that you could do it and succeed at it, chances are you are probably mistaken. The truth is that anyone can get into trading in stocks with the right kind of understanding and approach. In this article, we are going to look at some of the first things you should try to wrap your head around if you want to invest in stocks at some point in the near future. Learn these concepts first, and you should be well on your way.
Term Of Trading
In general, when you are trading in stocks you will be involved in either short-term trading, medium-term trading or long-term trading. In a sense, these are exactly as simple as they sound, and what you would pretty much expect them to mean. A short-term trade is likely to be extremely profitable, but it will also include a greater degree of risk than the other kinds. A medium-term is considered a little safer, but generally takes a little longer in the initial setting up. And of course long-term is about the safest, but the longest to get involved in and see real rewards. It’s useful to know the differences before you get started, so that you don’t get caught out.
Common Vs. Preferred Stock
There are generally two major types of stocks, and they are known as common and preferred respectively. It’s useful to have some kind of an idea about the differences between them so that you can start to appreciate some of the language you are likely to come across during trading, and so that you can expect to have the fullest possible grasp of what you are actually going to be doing. Common stock is what you will normally come across, and it is where you buy shares of a company, whether it is Twitter or Google or whatever. Preferred stock is the same, except without the usual voting rights of the shareholder – although it is generally considered to be a little safer to invest in this way.
During any trade of stock, the type has to be determined at some point. There are a few types, and it’s worth looking into this so you know what you will be getting int should you get into trading stocks. A market order is usually one which instructs a broker to trade shares at the best price that can be found at the time. In this way, you can’t guarantee price, but you will definitely get however many shares you want to get. Conversely, you can also use a limit order, which will mean that you won’t agree to buy shares until you can get all the ones you want.
As you can see, there is plenty which you might want to get to terms with before you start trading, so that you can be sure you are getting the best deal and making the most of it. Before I passed The Uniform Investment Adviser Law Examination I was investing. Can You See Yourself Investing In Stocks? Please share in the comments below. I really would love to know.
Until next time, shine amongst the stars!
‘This post may contain affiliate links’
If you like what you have read, make sure you don’t miss a single article!