Investing in stocks can be an excellent way for Canadians to build long term wealth. Yet, many people still don’t understand what the stock market is and how it works.
The stock market provides a platform to buy and sell investments. These investments involve buying shares of publicly traded companies. The stock prices of these companies will change based on many factors.
Does this sound confusing to you?
Don’t worry; you’re not alone. Many resources can teach you how to start investing in stocks. There are a few main steps you’ll need to take to get started.
First, you’ll need to open a trading account. This will allow you to have a platform to buy and sell stocks. Many trading platforms also provide helpful real-time updates and stock market quotes.
The next step is to research the companies where you’re planning to invest. Investment decisions involve asking yourself a few crucial questions. What are their annual earnings? How much debt do they have? Do they have a reliable management team?
After you’re confident in your decision, there’s only one thing left to do – buy the stock. To do so, log into your trading account, select the company and number of shares you want to buy, and place your order.
And that’s it – you have purchased your first stock!
THE BOTTOM LINE
The stock market is a great vehicle for Canadians who wish to build long term wealth. In fact, over the last hundred years, it has provided returns averaging ten percent. Beware, though statistics can vary, and there are no guarantees.
Like most things, there’s a learning curve. The more companies and stock market quotes you research, the more confident you will be.