Okay so you think you want to invest in the stock market yourself.  Although I am not saying that this is a monumental hurdle there are some things you really want to understand before delving into buying stocks yourself.  If phrases such as common shares, preferred shares, or board lot mean nothing to you hold onto your wallet for a little longer or much longer and keep reading.

Stocks are essentially a small share of a publicly traded company, large or small they’ve all got’em.  Buying these stocks (common shares) makes you a shareholder of each company you purchase with the right to vote on certain decisions.  Not that this matters much but that is one of the things that owning a stock entitles you to.  Virtually every publicly traded company has millions to hundreds of millions of shares so the vast majority of us are not talking about buying a controlling interest here, rather we just want a tiny or more accurately microscopic piece of the pie.   

In most cases we are buying common shares when buying stocks.  Common shares are shares that allow the owner to vote and if dividends are issued by the company receive usually small payments from the company once the preferred shareholders are paid.  Preferred shares as I just alluded to are a higher ranked stock than a common stock.  This means that when dividends are paid they often are paid first, only once they are paid do common shares receive any money from things like dividends.  Incidentally a dividend is just a small payment made by a company when they are doing well.  It is paid on a per stock basis and is usually small.  Generally speaking the larger companies pay bigger dividends.

So now you have a very basic idea of what a stock is how do you buy them?  If you choose to buy and sell stocks on your own you will need some type of online brokerage account.  Doing a thorough Internet search for online brokerages in your country is a prudent move.  With the advent of Internet stock trading the issue of buying what are called board lots is less of an issue than it used to be but still something you need to understand.  A board lot simply put is 100 shares of a stock.  Stocks are usually bought and sold in board lots, that is to say, in multiples of 100 shares.  If the company is large odd lots (a group of shares not a multiple of 100, such as 123 shares) can be bought or sold but with smaller less often traded companies odd lots can be difficult to pick up or unload.  Best practise is to stick to buying stocks in multiples of 100, if you just have to have that monster stock but 100 shares is out of your price range buy in smaller multiples such as 25 or 50 shares but do this sparingly.

There are so many aspects to investing in stocks that you are really doing yourself a favour by reading as much as you can on stock market investing before going out and buying stocks yourself.  Keep in mind though that you are on the right track.  Buying stocks yourself is a great way to grow your investments with knowledge and time you can be successful.

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