Tuesday, August 12, 2008

Stock Market for Beginners

Before going into the stock market, you must understand what is stock market is and what it does.

Basically, stock market is a place to trade shares of listed company in SGX (for Singapore), NYSE (for US) and so on.

So how do you start to trade stock?

First, go to any of the brokerage firm and open up a trading account and also a CDP account, which they will help you send in the application to SGX for the CDP account.

Trading account is for you to trade shares. Buy and sell shares with this account.
CDP account is for you to store your shares certificate. That is why now we don't receive any shares certificate anymore.

After all this is done, the one who open up the account for you will also be your broker. Any question you don't know and can't find answer to it, you can give him/her a call to clarify.

1)When do I purchase the shares of the company?

- Study what the company do for profit. Make sure the company is making profit and profit is going up every financial year and also it will distribute dividend after announcing profit. This is the kind of company I will look for as the price will go up due to profit going up every year, and I sure to get dividend every year.

2)What does buying a 1000 shares of the company mean?

- Buying 1000 shares of the company mean you have 1000 votes during AGM.

3)When do I sell it?

- When its overvalue, mean the listed price is higher than what the company is worth (you need more study and research on how to calculated the worth of the company).

4)Do I hold onto the stock if the price is neither going up or down for a period of time?

- I will hold if its giving out dividend every year and the company is maintaining the amount of profit.

The above is my opinion and to get the best answer, you got to do some self research and best is to take up courses provided by experts who is successful in the stock market.

Conculsion: The stock market can be very risky if you are not doing your homework before getting into it. If you do your homework well, then you are in control of the risk.


Stock Market for Beginners said...

Your post on stock market for beginners is simply wonderful. Thanks for all the tips.

Sam said...

Thanks for the comments.

We will learn together.