how do u buy shares in a company?

Question

I am new to this type of investment ,please elaborate in detail how this works, What do we get in return for buying shares for instance of a well reputed bank.? how long does it take for me to get any profit out of it,?

Answer 1

I'm going to assume that the company you are interested is a public company and that it is publicly traded on one of the many stock exchanges. The first thing you need is some kind of brokerage account. You can go the online route, like Scottrade, Ameritrade, etc. Or you might even be able to go through the bank you are interested in investing in. Once you set up an account and put some money into it, you then need to do some research on the company. First find out the stock ticker symbol, by doing a search in Yahoo Finance. Then you can place an order through your brokerage to buy some shares of stock. Each online broker has different screens, so I can't tell you exactly how.

For most stock, what you get is partial ownership of the company. Now, since most companies have millions, if not billions of outstanding shares, your ownership won't amount to much. But you can vote in yearly shareholder meetings, and if the company gives out dividends (handing out quarterly profits to shareholders), you get some of that too.

Profit is a tricky subject. You get profit 2 ways, 1) the dividends I just mentioned, and 2) if the stock price goes up, and you sell the stock at a higher price than what you purchased them for. But even if a company continues to make a profit month after month, that is no guarantee that the price of the stock will go up. Predicting stock price is not easy. And stock prices do go down. Even big companies can go bankrupt and the stock could be worthless, look at Enron or Tyco. You have to be prepared to lose 10-25% of your investment in a year.

My advice would be that you should do much more studying, before investing in individual stocks. Read a couple of books, magazines and websites. And only invest money that you don't need right away. If you want to take part in the overall trend of the stock market, start with buying index mutual funds. The market on average has outperformed bonds, CD's and savings accounts, so it's worth it to put money into the stock market.

Answer 2

to start accumalatig shares you need to first open an account with a share broker/ brokerage firm. than you can place order for buying any number of shares of any company traded on your stock exchange, ofcourse limited by your paying capacity upfront to your broker. the profits come when the price of the share goes up and you decide to sell. in no case should you look at share as a bank fixed deposit which will give you assured returns. shares can make money for you but only when someone else has lost an equivalent amount. so friend you may be that someone who is giving a profit to someone else!! ADVICE--- learn a lot more about share trading before taking a plunge else you will burn your fingers like millions of others before you