Investing in the Stock Exchange is the best way to obtain high profitability, but it also involves a high risk of losses. Therefore, before entering this market, it is essential to understand what are actions and how they work.
When it comes to variable income, practice and knowledge are essential to maximize gains. With that in mind, in this post we explain everything you need to know about stocks, their types and how to start investing. Want to know more? Check it out below!
What are shares?
Stocks are bonds that represent a percentage of a company's market value. When an investor buys shares, he takes a stake in that organization's property, while the company benefits by raising funds to expand its business.
Any person registered on the Stock Exchange can acquire these shares, becoming a member of the company's shareholder group. On the other hand, to put its shares up for sale, the organization needs to go through a IPO process, becoming a publicly traded company.
>> Want to know more about the Stock Exchange? Check out this other blog post:
Stock Exchange: understand what it is and how it works! <
What are the advantages and risks of the stock market?
For the company, the great advantage of going public is raise funds that will be invested in new projects, increasing their market value.
For those who invest, buying shares is the simplest way to become a partner in a company. From there, there is the possibility of obtaining very high returns, depending on the performance of the business in the market.
Upon becoming a shareholder, the investor has rights and duties. The greater the participation, the greater the responsibility for making decisions, and the gains are also proportional to the number of roles obtained.
However, there is also the risk of losing a lot of money, if the company experiences financial difficulties. These fluctuations are the basis of the market for variable income, which moves daily according to the interests of investors.
Know how to deal with the ups and downs it is critical to increase the chances of good results and mitigate risks. Therefore, in addition to knowing what stocks are, it is important to follow the market, read news and consume a lot of content on variable income, through books, videos and podcasts.
All of this will help you train your investor vision and learn how the Stock Exchange works.
What types of actions are available?
Once you understand what stocks are, it's time to learn about the types of stocks available in the market. Meet each of them below.
Common shares (ON)
This type of action guarantees the investor the right to vote in company decisions. The more papers are purchased, the closer the buyer is to managing the business. In this way, large shareholders manage to have more influence than small investors.
Preferred shares (PN)
Unlike common shares, preferred shares do not have voting power at meetings. I don't understand, who have these roles win preference when receiving the payment of dividends and compensation.
Also called Share Deposit Certificate, this type of investment is a package formed by assets of different natures, such as ON and PN shares. Thus, the buyer is able to obtain a composition of different actions in a single product.
To enter the world of variable income, it is essential to understand what stocks are blue chip. They consist of roles of companies with large market value, which have a high volume of trading on the Stock Exchange.
One of the great advantages of these shares is their high liquidity, that is, they can be sold more easily given the large number of people interested in buying them.
mid caps they are midsize company stocks and intermediate level of negotiation. As they are shares of growing companies, they may have a higher valuation perspective than the blue chips.
However, before investing it is necessary to make a careful analysis, as the risk of losses is also usually higher.
At small caps they are shares of smaller capitalization companies on the Stock Exchange. Because they are cheaper, they can generate greater profitability. However, they also have lower liquidity, which makes it difficult to find new buyers for an eventual resale.
How does the stock market work?
Stock trading can take place in two ways: on the primary market and on the secondary market.
At the primary market, the investor buys the shares directly from the company, right after the IPO. Everything happens through a stockbroker, the institution responsible for bridging the gap between the organizations that are putting the shares up for sale and their buyers.
At the secondary market, investors trade shares with each other, and no longer directly with the company. This procedure is also mediated by brokers, who execute buy and sell orders on their online platforms. investments.
How to invest in stocks?
If you are interested in knowing what stocks are, you may be curious to learn how to invest in this market. The good news is that today, with the advancement of technology, this procedure has become very simple. Besides study a lot, just follow the steps below:
Know your investor profile
Every investor fits into one of these three profiles:
- conservative: prioritizes the lowest risk, even if the profitability is not high;
- moderate: prioritizes the balance between risk and profitability;
- bold: prioritizes the highest profitability, even if the risks are high.
If your profile is conservative, the stock market is not for you. Whether you fit the moderate or bold type, the Stock Exchange has options that are right for you. Just evaluate the alternatives and decide which one best suits your goals.
Open an account at a brokerage
To invest in stocks, you need to have an account with a investment broker. Just choose yours and register online, without leaving your home. Then transfer the money and start trading online. To do this, simply log in to the platform and access the home broker.
Know your options
At the home broker you will basically find four different ways to invest in stocks, each one best suited for an investor profile. Check out how they work below.
You investment funds are one of the main gateways to the equity market.
The great advantage of this modality is that the investor has the help of a specialist to build the stock portfolio. However, you have to pay a fee for this, and the profitability is not the highest.
They are similar to investment funds, but they have a limited number of shareholders. Thus, the cost of brokerage and custody is diluted among members, and the administrative fee is flexible.
You ETFs, or Exchange Traded Funds, are also known as stock baskets. In this option, the investor can buy a larger number of shares at once, being able to diversify his portfolio in an easier way. All you have to do is pay the brokerage fees and handling fees.
Build your own wallet
If you have enough experience and knowledge, the best move is invest on your own and assemble your stock portfolio individually. This way, you avoid paying extra fees and make your choices as you see fit.
Now that you know what stocks are and how to invest in the stock market, how about putting what you learned into practice? Follow the market, learn from those who are successful and build your own investment portfolio! With commitment, you have a good chance of succeeding in this initiative.
Did you like the post? Tell us in the comments about your experience with this type of investment. We are available to answer any questions you may have on the subject.
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