What do I need to know before I buy stock in a company?

Question

I have never purchased a stock or bond and know nothing about it. I want to look into purchasing stocks/bonds for my two young daughters. What type of company should I look for and how to I buy them?

Answer 1

i've started investing about a month ago with around $50000 and have made $3000 already. Investing depends on how much risk you are willing to take. You could hunt down potential google's that are extremely volatile or play it safe and stick with company's that have been long established and yield high dividends(payment to shareholders). Personally, I put a mix of both in my portfolio. In any company, you should look for 1)good management 2)increasing profits in their annual and quarterly reports 3)high, consistent volume 4) great product (or service) in a growing industry. Just a few tips: diversify your portfolio and scrutinize every stock before you buy it. some stocks i've been trading with are stp, nvt, rvbd, gzfx, rhwc, ccj, acas, gmsc, msft, yhoo, adbe.
good luck with stock investing.

Answer 2

Since your objective is to invest today and secure a higher but safe value at a future date when your daughters would probably need funds, you need to select investment avenues that provide safety and growth. These twin objectives can best be fulfilled by blue chips i.e., stocks of highly rated companies. You will get the following benefits by investing in them:
1. There will be price gains, both in the short and the long run, and the probability of capital gains would be significant.
2. Even if the return today will be low owing to a high acquisition price, it will tend to rise with rising dividends, bonuses, splits etc which usually come with greater certainty from blue chip companies.
3. You can en-cash these stocks anytime and with zero or low costs and with expectations of a higher cash realization.
You can contact a broker or a sub/broker of a stock exchange and get the deal done.