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Investment Online – Getting It Right

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					Investment Online – Getting It Right
Are you looking to start investing online and want to make sure that you get it right? Without the right knowledge and information online investing can
be an intimidating experience. However, if you do your research before starting and see what different online brokers offer, you can turn it into a very
profitable and rewarding experience. There are several very important tips you need to know before starting to invest online.


Ensure your online trading costs are low


Even before you start investing online, you need to consider trading commissions. Trading expenses can be all over the place when dealing with
online brokers. Costs can run anywhere from $5 all the way to $50 and more. If you plan on investing small amounts of money into stocks then you
need to make sure your online broker has low trade expenses of under $15 or these costs will eat up all your account balance and wipe out any
profits.
When investing online you should also be aware of account fees and account minimums. In order to protect any profits that you make you need to
make certain that your account has low account maintenance fees, preferably an account with no account maintenance fees. Numerous online
investment companies also have a set minimum account balances. If you account falls below that minimum balance required, you will get charged a
fee. Over time these fees can take your balance down to $0! It is crucial to make certain that the online brokerage company you choose has no
minimum account balances.


Familiarise yourself with basic online investment terms


Before you start investing you definitely need to understand Basic Stock Terms. The more terms you know, the better your stock market vocabulary
and the faster you can learn. Here is a list of basic terms involved with stocks and their definitions, in plain English.
Ticker - The unique symbol used for a company on a stock exchange. For example, Microsoft's ticker symbol is MSFT.
Share Price - Price you have to pay to buy 1 share of stock.
Shareholder - A person who owns shares of stock in a company.
Commission Fees - The fee you have to pay to place a trade to buy stock.
Dividends - A cash payout from a company to its shareholders. This payment is based on the amount of shares you own, the price of the stock and the
dividend amount. The payment is usually every quarter.
Risk - The probability of losing money from owning a stock. Risk is usually classified as Low, Medium and High. Or Conservative, Moderate and
Aggressive.
Volatility - The amount of price activity of a stock. A stock, whose price goes way up or way down daily, is volatile. You can guess what not volatile is,
right?
Prospectus - A detailed financial document a company publishes, for shareholders to see what they are getting their selves into.
Bear Market - A time when the stock market consistently drops.
Bull Market - A time when the stock market consistently rises.
There are many more terms used but these should help you get a basic idea of stock investing. OK, so you got some basic info about investing in
stocks. It is time to learn how to buy shares of a stock.


The right way to buy a stock online


The first thing you should do before buying online stocks is find out how many shares you want. Then take the current share price of the stock and
multiply it by the amount you want to buy. There are many places you can look to see what the share price is. Google will recognize most ticker
symbols if you just enter them in the search box. Once you know the amount you need to spend to buy the shares you want you can place a trade with
your online broker.


Diversify your portfolio to minimize risk


Understanding the basics of risk is simple. High risk means there is a higher chance you will lose money from the stock and low risk means there is
less risk you will lose money. Controlling risk is the key element in online investing. There are various different strategies for minimizing risk. The most
common and easiest one is to diversify. To diversify, means to buy a mixed group of stocks with different levels of risk. This will decrease your
chances of losing money.
There are many resources out there to help you pick stocks. Don't listen to any of them unless you do research for yourself first. Luckily for me when I
was in college we had a class on E-commerce which talked about the best online business models to follow. They mentioned a company of self made
millionaires called The Motley Fools. They went in full detail of how they were successful in their online business of picking stocks. I have been using
them ever since and trust their advice. Their philosophy is in long term value investing, which is a much less riskier style of investing.


About the Author
Peter Smith is someone who has always believed that trading wisely is essential to be a successful trader for a long time. He believes investment
online is not for the faint hearted and believes you need to put certain strategies in place for it all to work. For further information, visit him on Einvest
Online


Source: http://www.seoscores.com/articles

				
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