How to make money buying and selling shares

Posted by Felix Okoli on Monday December 23, 2013 at 15:42:16:

A lot of people know that buying and selling shares is a very lucrative business, but they don’t know what it starts to start the business or how the business runs. This article would break down all you need to know about how to make money buying and selling shares and try to remember that Buying and Selling of is not a get rich quick venture, but it can be very profitable in the long run.
Let’s begin with explaining what a Share is. As the name implies Shares of a Company is buying a lot or place in that Company. When you buy a share from a Company, you are actually a stake holder in that Company, and it goes this way, when a Company wants to raise money for expansion, the company’s founders approached the Stock exchange and have them sell shares to the public, at a prize of maybe #25.50 per share, for a share lot of 1,000,000. This means that the cost of each share is #25.50, so a buying a share lot of 10,000 would be at the cost of #255,000.

WHAT TO LOOK OUT FOR BEFORE BUYING SHARES OF A COMPANY: Before a person ventures into the business of buying and selling shares, there are some things to lookout for before purchasing Shares from a Company. They include:

-The Financial statement of the Company for the past two years: What has been the financial capacity of the Company for the past few years? How profitable has the Company been for the past few years.

- How stable has the share of the Company been for the past few years: Has the Company’s Shares been stable and Upward, how volatile has the Shares been, and finally was there increase and profit in the Shares for the past two years. Etc

In case you do not know how to study a Company to find out such information, there are Stockbrokers whose job is to help people study and purchase Shares that would be profitable for a fee.

HOW TO MAKE MONEY BUYING AND SELLING OF SHARES:
There are two major ways to make money with Shares of a Company. Register with a Stockbroker and get CSCS numbers, make sure to include the GSM number to be getting transaction alert.

Capital Appreciation: This is what most Share investors do is that, they buy shares at lower prize, and sell it off when the prize increases. For instance if a Company advertises it’s share for #10 per share, a Stock investor can buy 1,000 lot of shares at #10,000, in the future when the Share price has gone up to #15 per share, the person then resells the Share at the prize of #15,000 to make a profit of #5,000, the Stock investor takes the profit to purchase more Shares, with hope of reselling them in the future. This method requires a lot of patience and alertness from the Stock investor, to know when to buy and when to sell the shares.

Dividends from Shares: This involves buying shares of a Company, then waiting for annual dividends from the Shares. When a Company offers its Shares in the stock market, the money is usually invested and profits from such investments are shared among Shareholders at the end of each financial year as dividends.