How to Earn Money: First Steps

Often you hear the phrase that you need additional income, as well as something like "I want to make money." One of the most interesting ways of earning is trading in the securities market. The stock market allows you to receive additional income without leaving your main job (or staying at home). This is facilitated by the development of technology, the availability of the Internet and a sufficient number of investment and brokerage companies. The most understandable, popular and accessible tools are stocks. Since earning on shares is not so simple, it is necessary to familiarize yourself with the basic concepts of the securities market. Help in this can books, courses and seminars of brokerage companies.

First of all, determine for yourself - how much you are willing to allocate for investment in shares. Keep in mind that you can both make money on stocks and lose money completely, so start with a small (comfortable for your budget) amount.

Then follows the search for a brokerage company, because, according to the laws of Russia, transactions on the stock exchange are possible only with the help of an intermediary - a brokerage firm. Find a reliable brokerage company is easy - on financial portals there are ratings of the largest investment companies and brokers. Keep in mind that for every operation the broker holds a commission, so it is advisable to get acquainted with the rates of brokerage services. In addition, reliable and reputable brokerage companies conduct training courses, master classes and seminars, where you can learn how to make money on stocks and other investment tools.

The third step is to choose an investment strategy, it depends entirely on your preferences, availability of free time, readiness to take risks. There are two main strategies: active and passive. An active strategy of behavior in the stock market assumes that the investor is constantly revising the portfolio structure. That is, it often buys and sells shares depending on the situation on the stock exchange. Supporters of a passive strategy are set for a minimum number of transactions, their task is to find a cheap (undervalued by the market) share and sell it at a high price in the future. How to make money on stocks? The main principle of trading on the stock exchange is "Buy cheaper, sell more." The main difference in the strategy of behavior in the stock market is the time interval between the "buy" and "sell" actions.

The fourth step is to determine which stocks will allow the chosen strategy to be implemented. If you are an active investor, then pay attention to the "blue chips", because with them is the majority of transactions, they are the most liquid - you can buy or sell them at any time of the exchange. Shares of the second tier will be suitable for passive investors, since among them often there are underappreciated securities. Of course, these recommendations are general, for example, shares of Sberbank, being a blue chip, rose in price (from 14 rubles to 110 per share), which allowed long-term investors to earn excellent money. Within this period, there were also significant fluctuations in the quotations of this stock, which enabled active investors to earn even more shares of Sberbank.

Another answer to the question of how to make money on shares is getting dividends. The action is not only an object of speculation on the stock exchange, but also a equity security that grants the right to receive a part of the company's profit. Ordinary shares do not guarantee this right, the owners of ordinary shares receive dividends only if the management of the joint-stock company takes such decision on the results of the financial year. On preferred shares, dividends are guaranteed, but holders of these shares can not participate in the management of the company.