Stock Market Investment For Beginners

Investing in the stock market can be extremely lucrative but it can also be very risky and costly for those who are not well prepared. First of all, beginners need to know what the stock is and its associated features. Understanding the basics of the market and knowing how stock market works is a key to success for new beginners.

Stocks (also known as equities or shares) represent ownership in a company. Shares in a listed company are normally transferred through the stock exchanges. This is a place, whether physical or electronic, where stocks and other securities in listed companies are bought and sold. Some of the world's biggest stock exchanges are NYSE Euronext, Tokyo Stock Exchange, NASDAQ OMX, among others.

When you are buying or selling shares on any of the securities exchanges, you will normally go through an intermediary known as a broker. A brokerage firm (or simply brokerage) acts as a stockbroker and is licensed to buy and sell securities for clients.

There are two general ways you can trade stocks, either through a full service broker or a discount broker. a full service broker will provide you with a variety of financial products and services including research and advice, tax tips and much more. Of course, full-service brokerages are more expensive than discount brokerages. After you have chosen a stockbroker, you are going to begin buying shares and holding onto them until they increase in prices before selling.

* Featured Article: Stock Market Basics - What Is A Stock?
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