Yesterday I brought up the common types of investments available in the market. Today I shall start off with a brief introduction of the most common of all, the Stockmarket, which is also my favourite of all investments! I am not going to explain in detail what stockmarket is because i believe everyone knows what it is by now. Essentially it is a trading place where you can trade the shares of a listed company with the objective of making a positive return in capital. Basically, you make money when you sell the shares at a higher price than your original purchase price. In some markets, you can also short sell the shares, i.e, you make profit from the decline in price of a share. However, short-selling is generally not recommended for retail investors as it is risky and heavily regulated.
So why is stockmarket so popular? Following are some of the reasons:
- anyone above 18 years old are eligible to trade;
- trading (buy or sell) is made simple. All you need is a trading account, a phone line (to contact your broker for instruction) or trade online;
- highly liquid, i.e., you can get your money back any time (within settlement period normally within 3 working days)
- buying tips are everywhere!! You hear it from your friends, relatives, peers, workers, and even the tea lady!
- The prospect of making fast money and exciting return by trading in hot stocks! So and so told you how easy it is to make tons of money! (But they forgot to tell you how much they lost!)
Later i shall explore the types of stocks and what to look for in stockmarket investment.
1 comment:
Hey sonny, great articles! enjoyed reading all! keep coming with more tips man! tks!
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