Modern Securities: What Is It?
Modern stocks are quite different from those people who are far from the
securities market are used to imagine. In reality, only bills of exchange and
savings certificates used by banks still exist in their hard form. Everything
else has long lost its physical form and become digital. Now it is impossible
to buy a portfolio of stocks and get it in physical form.
The purchase process now is merely a process of obtaining a record:
-
in a special company registry,
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on the exchange,
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at the broker's depository — on a separate account for storing
securities.
Though a buyer doesn’t really receive securities in the hard form, he
still receives legal rights to use them and resell them.
How to Buy Stocks?
Purchase of stocks by a private person is prohibited by the law. To do this, you need to
use the services of a broker — an intermediary company that provides
individuals with access to the exchange and opens related accounts:
brokerage and depository. In fact, all transactions are made by a broker, but
only on behalf of a trader. There are several ways to place an order:
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Calling a broker is not a quick, but expensive method — a $25 commission
is charged for it.
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By e-mail — there is still a lag between sending such an order and its
execution, so you can lose some profit, especially when trading during the day.
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In trading terminal — special software for a PC or a smartphone that
provides a direct Internet connection to the server and provides instant transactions.
This method is the most convenient, since it additionally provides statistics
tools to evaluate your trade performance.
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Through broker's website — modern brokers provide access to the web
version of the terminal, and you do not need to install additional software.
Thus, if an individual wants to buy stocks, it will take only 5 simple
steps:
1.
choose a broker,
2.
register on its website,
3.
get a unique login and password for access to the exchange,
4.
install a trading terminal — software for a PC or application for a
smartphone,
5.
log in to it using the data received.
After logging into his account, a trader immediately gets access to the
current quotes and, as soon as his account is funded, he can make the first
transactions.
Many brokers and trading terminals also meet the need of novice traders
and provide access to a demo account and an account with virtual currency. All
this allows you to quickly get used to the stock exchange, understanding how
and when it is best to make transactions without a risk to lose real money.
What Stocks Can I Buy?
With access to the stock exchange, a trader can buy any listed stocks.
The most logical and profitable investment is the purchase of foreign
companies, since currency prices are protected from the depreciation of the
ruble. Russian exchanges provide a limited number of such instruments, so you’d
better choose a broker who can provide access to US exchanges. Trading on the
US market, it is much easier to find a company with steadily rising shares.
The most profitable and demanded today are shares of leading companies in
certain industries: Apple, Google, Microsoft in the tech sector, TeslaMotors in
mechanical engineering, Coca-Cola and McDonalds in the food industry.
A riskier way is to buy stocks of potentially successful companies, which
are not too well-known and are cheap enough, but have every chance of fast
growth. In other words, they can skyrocket, bringing considerable income to
shareholders who invested before the expected growth. However, in order to make
profit, you should have skills to find such a promising small company and
predict its growth.
How to Sell Securities?
Working through a broker, an individual can not only buy stocks easily,
but also sell them. To do this, you just need to submit an order for sale in a
trading terminal, setting your own price or choosing the option with automatic
setting of the market price.
In fact, the process of buying and selling is quite easy and almost every
modern man can do this. The most difficult thing is to choose the right moment
of sale and purchase. It is the matter of experience, and anyone can easily
gain it by participating in trade.