Today, almost every representative of modern society wants to gain financial independence and become a wealthy person. And such an aspiration is quite justified: material well-being gives confidence in the future. Of course, today there is a whole arsenal of ways in which a person can be enriched. And one of the most effective is the acquisition and sale of securities. In addition, their owners may not make any transactions with them at all, but receive a fixed income, which is called a dividend. That is why the question of how to make money on stocks is gaining tremendous relevance today. But before proceeding to its consideration, we will decide on why it makes sense to invest money in the above securities.
Why stocks?
Buying and selling shares is a sure way to save and increase your capital, primarily because it allows you, as already emphasized, to have a stable profit.
However, much depends on whether the investment portfolio is chosen correctly. Anyone who is interested in how to make money on stocks should also remember that there is an opportunity to go broke in this business, so you should not build any illusions about quick enrichment. To successfully trade in securities, you need to learn, understand the basics of trading, read specialized literature on this topic and communicate with those who have achieved high results in this business.
Well, for beginners who still have vague ideas about how to make money on stocks, we can recommend the following: find a good broker who, for a certain percentage, will help you make a successful transaction.
So, there are several options for generating income using the above securities. The first involves enrichment due to the difference in rates. As a rule, he is chosen by one who is passionate about money and morally resistant to financial risks. The second involves gaining financial stability through dividends. This method is more reliable and less risky.
Before moving on to the practical side of the issue of how to make money on stocks, we will determine what this financial instrument is.
The concept
A stock is a security that certifies the right to receive part of the profits from an enterprise. Its owner becomes the co-founder of the legal entity that issued it. The size of dividends is distributed among all shareholders in proportion to the number of securities. Moreover, the owner of the security may receive dividends or sell it to another person who also owns shares of the same company. It is to him that the law provides the preemptive right to purchase.
Stock market
Not sure how to make money on stocks? Go to the stock market. This platform is specifically designed to transact with securities. But where to start? First of all, it is necessary to conclude an agreement with a reputable broker who will open a demo account for a beginner. Thus, a novice businessman will be able to begin training in trading in the stock market. In the process, he does not risk anything, since he will work with virtual money. After you gain the necessary experience and knowledge, you can try your hand at a real account.
Of course, the stock market obeys certain laws.It is sometimes difficult for even seasoned traders to navigate them, not to mention newcomers who have a very distant idea of how to make money on stocks. If you are not sure of the correctness of the decision made, then do not make a deal.
What do you need to remember?
An analysis of the feedback of novice traders suggests that most beginners make one serious mistake: they invest only in the most expensive securities, hoping to immediately get fabulous profits. We must take into account the fact that securities can jump in price due to external factors, but their high cost is not an indicator of reliability at all. Today, the market has affected the growth of their value, and tomorrow they can significantly lose value. As a result, the investor may be in a big loss. In some cases, low-cost stocks should be purchased, but you need to be sure that the issuing company is projecting growth.
If the trader pursues the goal of obtaining passive income, then it is better to focus on securities providing for dividend payments.
Work algorithm
So, the beginner has passed the training stage and is ready to act in practice, fully understanding the mechanism of how to make money on stocks.
Now he has a difficult choice: which shares to buy? Then everything is simple: as soon as the price rises up, it will be possible to complete a sale transaction. The difference between the acquisition and sale will be the amount of profit. Some experts recommend building their own portfolio of securities for successful trading.
Amount of income
Of course, beginners are primarily interested in the question of how much they earn on stocks. Much here depends on which trading option the trader used. If we are talking about buying securities of a particular company, then the amount of income will be determined by two factors: dividends and the degree of appreciation of shares. Real trading involves less risk and low profit. But the speculative involves the purchase of not the shares themselves, but obligations to transfer them. In the latter case, the amount of potential income increases significantly. The fact is that it is affected by the "leverage" - an option that is provided by the broker. For example, if its value is 1: 100, and the size of the deposit is $ 100, then a transaction can be opened for an amount that is one hundred times higher than the funds available in the account.
And yet, how much can you earn on stocks? Statistical data confirm that a professional trader can well count on 40-60% per annum. Naturally, these are not fabulous profits, but they far exceed the profit on interest deposits offered by banks.
What securities to invest in?
This issue is decided by each individually. You can listen to the opinions of experts, or you can make a choice on the basis of technical and fundamental analyzes.
Some in this matter even connect their own intuition. The main thing to keep in mind is that stocks must be highly liquid. For the right choice of securities, you must also follow the news of the stock market and track the economic calendar.
What stocks can I earn? Testimonials from experienced traders indicate that you should look closely at enterprises that belong to the privileged caste. This, in particular, refers to Gazprom, Sberbank, Severstal, Uralkali, Surgutneftegaz ... Such companies are stable in growth, so their securities are almost always in demand.
World Wide Web Trading
No less relevant at present is the question of how to make money on stocks on the Internet.
Yes, you can also trade securities online. Traders make transactions through special software that allows you to communicate with exchange platforms via Runet.Buying and selling shares online is not much different from real trading.
In the first case, income is derived from short-term stock price adjustments. A trader acquires securities in order to subsequently sell them at a higher cost. But such an ideal model in practice does not always happen.
It is noteworthy that online trading allows market participants not to adhere to the above rule. In particular, there are cases when an investor sells securities at the maximum cost, having previously borrowed them from a broker, and then buys the same securities, but at the lowest price. The above strategy allows you to generate income even in conditions when the market is showing negative dynamics.
Internet trading is an ideal launching pad for those who prefer to use “tough” speculative tactics. Here, investors make transactions more often than in standard trading.
The virtual platform performs a huge number of operations during the day.
Conclusion
So, we found out whether it is possible to earn on stocks. However, you should not treat this business as a roulette in a casino. It requires a serious and competent approach: you need to regularly monitor the situation on the stock market, follow the news, use technical and fundamental analyzes in a timely manner.
For successful trading, a psychological attitude is also very important: transactions should be made with a sober head and cold calculation. Very often, newcomers, having received profit from the first transactions, subsequently lose control of themselves and, succumbing to the excitement, lose the entire deposit as a whole. It is not recommended to borrow money in order to hit a big jackpot in the stock market. It makes no sense to buy indiscriminately all shares in a row: it is necessary to study in advance the reliability of the issuing companies.
An important component of success is investor discipline. Only a competent approach to business will bring good profit.
