How to buy shares online

Investing in stock can be a risky business — but, if you invest wisely, you will find that investing has the potential to be beneficial. Not only that, it’s popular, too. As much as 2% of India’s population invests in stocks — and while that may not sound like much, that comes to more than 27.5 million people! 

Perhaps dealing with shares is something you have considered. It can be difficult to know where to begin, especially with so much conflicting advice out there. This article will give you a better idea of what the stock market is. It will explain the three main approaches to dealing with stocks: investing through a broker, direct stock purchase plans, and trading.

Buy shares through a broker

In simple terms, investing in stock means that you are purchasing a piece of the value of a business — a share — as listed on a stock exchange. Shares do not have a consistent value; rather, their price rises and falls with the company’s investment value, determined by the market demand for that company’s products and services.

Investing in stock is a popular way of making income. Not only are the funds you invest protected from inflation and taxes, but you can also make more through dividends, or through selling your shares. On top of that, it’s easier than ever to invest in the stock market.

If you’ve decided to jump into investing, you may be wondering how to get started. Don’t know where to begin? Read on to learn how to buy and sell shares online. 

Buying shares online

The easiest way to buy shares online is through a stock trading platform. After making an account, you can browse through the platform’s extensive list of shares. Find the one you want, then decide on a value or quantity of shares. You must have enough funds in your account to cover the cost of your purchase.

Once you’ve accepted the quote, your stocks will show up in your account. Your account, and the stocks within it, are collectively known as your portfolio.

Selling shares online

Selling shares online is no more difficult than buying them. Simply choose the value or quantity of stocks you wish to sell, then make your deal. Any returns you might make will show up in your account.

It’s difficult to know when it’s the right time to sell your shares, but try and think critically about the matter. How likely is it that the business will continue growing? Would it be better to sell your shares at the current value? These are the types of questions you should be asking yourself.

Finding a broker

When you’re just getting started trading, it’s crucial that you find the right broker for you. Two types of brokers you may wish to consider are full-service and discount brokers, both of which this article will now consider.

Full-service brokers

The list of services offered by full-service brokers will differ between firms. However, the below list can give you a general idea of what services you can expect:

• Advice and guidance from investment experts
• Access to the latest research on stocks
• Opportunities to invest in private hedge funds

Such services do not come without a cost. However, full-service broker fees are more than worth it when you consider you will have help and guidance from experienced experts in the field.

Discount brokers

If you don’t have the funds for a full-service broker, then discount brokers are worth considering. Some of their main advantages include:

• Lower cost service, especially when compared to full-service firms
• Access to research and information on stocks
• Since discount brokers don’t offer consultation, they are not interested in convincing you to invest in a particular stock, so their service is impartial

While it’s true that discount brokers do not include consultancy services as full-service firms do, they are still very useful, especially when you are new to investing and don’t have much savings built up yet.

Using a direct stock purchase plan

You may be wondering how to buy shares online without a broker, or if that’s even possible in the first place. Well, it is! 

If a broker isn’t for you, then you may consider using a direct stock purchase plan or DSPP. DSPPs are programs for people who are looking to purchase stock directly from a business.

DSPPs are advantageous for investors who are just getting started and have low funds. This is because DSPPs have even lower fees than discount brokers — sometimes no fees at all. It’s important to note, however, that not all firms offer DSPPs, and they may include restrictions that dictate when you can buy stock.

Trading

Let’s consider how to buy, sell, and trade stocks online. 

While investors build capital slowly over time through purchasing and holding stocks, traders make transactions far more frequently, taking advantage of short-term market fluctuations.

There are different kinds of traders, some of which hold their positions longer than others, but the principle is the same: you can purchase or sell a stock without owning the real asset. The idea is to predict the price direction correctly and set the levels the price will be able to reach within a certain period. Timeframes can range from a few minutes to several weeks.

Final thoughts

This article has taken you through some of the basics of investing online. Make sure that you heed these recommendations and think carefully about your options when trading, in everything from selecting a broker or trading platform to making a purchase or sale.