Posts Tagged ‘Before’
Stock Investing Basics – 3 Things to Do Before You Get Started
Posted by admin in Preferred Stock on January 12th, 2010
No doubt you can make millions of dollar and get rich from stock market, but it won’t happen if you missed these critical checklists in the first place. In case you are so eager to invest in stock market, hold yourself first. Make sure you have the right starting point before putting any money in any stock.
Have Enough Money
You can invest everything you have in savings into stock market, but it is like risking your life into it. The truth is, there is nothing as guaranteed as cash deposit when it comes to investing no matter how strong the stock is. So, it is a wise decision to create an emergency fund in case the stock is turning against you. I always advise my friends to keep at least six months income worth in savings before investing in share market.
Trust me, you can concentrate much better by doing just this.
Understand Yourself
There are many ways to make money in stock market. For instance, you can buy and hold the stock forever, buy and sell stocks after holding them for few years or even trade the stocks in the same day. Believe me, there is no one way that is better than the other. It is really up to you which investing style suits your needs. Besides, your investing capability, commitment and the available fund will affect your preference too.
Spend time asking yourself, which investing style you prefer the most.
Aware of the Risks
There are three risks associated with stock investing; namely individual financial risk (possibility of you went broke), company business risk (possibility of the company went down) and market risk (possibility of weak market sentiment). There is no way you can avoid these risks, but you can reduce the risks by applying some mitigation measures. For example, invest in stock market whenever you have enough money or buy stocks that offer huge growth potential only.
It is not about avoiding risk that matters, but how you can manage the risk is more important.
Not many investors did these whenever they’ve decided to invest in stock market. What they do is simply jump into the market using others tips. Stock brokers, insiders and friends influence them the most in deciding which stocks to invest. If you are high risk investors’ type, then it is fine. But if you are looking for long term profits, I suggest you stop it now.
2 Types of Stock You Need to Know Before Investing
Posted by admin in Preferred Stock on December 13th, 2009
There are two types of stock that you should be familiar with before you enter the investing world. These two include: common stock and preferred stock. Both have their pros and cons which will be fully explained in this article.
Common stock is the “normal” or “basic” stock you can invest in that is directly influenced by the profits of losses of a company. This is the stock that the average investor would buy. If I go on my computer and buy 100 shares of Microsoft, I will be buying common stock. This is also the stock that is given out to employees and such. This stock, much like all other investments, involves high risk but is also on opportunity to make a large profit. These have no fixed dividends to them so their dividends are handed out after all the dividends of the preferred stocks are handed out.
Preferred stock is an ownership of a company claiming more assets and earnings than common stock. The fixed dividends of this stock are paid out before the dividends of the other. Each structure of a preferred stock is specific to the company. Although this stock may appear to have more potential, there are downsides to it. They do have priority over common stock but they must give up their voting rights as well. Preferred also has less potential to appreciate. Now that you know different types of stock, you can look into which one would be the best for you to invest in.