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How to choose and buy stocks: a short manual for the beginner

Written by loan

Share — equity securities. It confirms the right of the owner to receive dividends — part of net income from the activities of the Issuer.

The owners of stock shares with entrepreneurs, not only profit, but also risks. Any organization in disadvantaged circumstances may be in distress, then her assets will fall significantly in price.

If the case goes to liquidation, the holders of the securities will be entitled to part of the property of the company after payments to creditors and preferred shareholders.

How to buy stocks?

To buy securities, you must contact a brokerage firm and open an account — either a regular or individual investment.

Then you will make money and get access to the trading floor. There you can view the available stocks, to obtain information about them. After making your selection, you will need to issue the purchase requisition. A process usually carried out via the Internet.

The firm”s services, of course, is not free — customers have to pay the Commission, even when they are losing.

Existing varieties

There are two types of stock:

  • normal;
  • preferred.

Holders of preferred shares have the right to priority dividends, and regardless of the scale of profits. For them is set to a constant rate.

When securities are ordinary, their owner makes a profit secondarily and only after the replenishment of reserves of the company.

The details of the choice

The nominal value of shares is established through dividing the sum of the authorized capital stock the total number of issued securities.

This figure serves as a reference point for determining the market price, which largely depends on the ratio between supply and demand on the exchanges.

Choosing a stock should, in the first place, to consider the factor of liquidity. Acceptable strategy for the beginner — invest in good demand securities that are easy to sell.

Take note of the following information:

  • conditions of dividend payments, which specifies the issuing company (it is important to know the timing of payments);
  • the reputation and history of the firm that issued the shares;
  • the situation in the sector;
  • a fresh mix of expert opinions.

In Russia, investors-beginners often prefer to invest in the shares of energy sales companies — Surrogates, Bashneft and others.


The interests of investors protects № 46-FZ “On protection of rights and legitimate interests of investors on securities market” dated 05.03.1999.

It is necessary to know and consider.

The law, in particular, determines how the Issuer is obliged to inform the shareholders about the current situation.

If you make decisions on buying and selling of stocks yourself, you’ll need to follow the reporting materials of the company, regularly review the news of her activities.

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