Compare stocks with Mutual Fund. Ease with which one can buy stocks online (compared to mutual funds) is fantastic. Compare stocks with real estate property. One can buy stocks with Rs 500 in pocket. But one may not be able to buy a property even with Rs 100,000 in pocket. In short, property investment is too expensive for a common man. Investments that are popular among common men are all low-capital-intensive options. People have fast-cash-flow-in in form of salary. Systematic investments which does not demand large sums of money are more popular. It is much easier to invest small amounts regularly than invest large amounts.
Stock trading is not capital intensive. Online trading also eliminated interference of middle men
Involvement of common man in stock market has increased a lot in last decade. Possibility of buying stocks online has eliminated the interference of middle men (stock brokers). Earlier, brokers used to buy stocks for us. In turn they charged commissions. Back then, brokers were the only source of stock purchase. The down side of trading through brokers was high commission & third party dependency. Their charges used used to eat the profits generated from stocks. Some broker charge fees in tune of: 6-8% of purchase cost. At times it is even difficult to earn 6-8%. Giving commission of 6-8% looks like a crime. People like me, who likes to do things on own, used to avoid stock market all together. Uneasiness in dealing with brokers was high. But online trading platforms with facility to buy stocks online changed things for good.
Why everyone does not buy stocks?
The ease with which one can buy stocks makes it likable. The affordability factor makes it more likable. If its so good why everyone does not buy stocks online? Frankly speaking, people cannot dare to invest in stocks. The risk of loss in stock investment is high. Stocks themselves are not risky. Lack of know-how results in loss of money. There are people who are making fortunes from stock investing. These people have acquired skills that other do not know. They know how to identify fundamentally sound companies. They also know how to do market price valuation of stocks. Before one buy stocks online careful analysis is a must.
Why people hesitate to buy stocks online.
Online trading platforms are very convenient to use. Still many people hesitate to buy and sell stocks online. There are people who are still not convenient living life online. The become even more uncomfortable in dealing with stock online. For them the big question is, how to buy stocks online? Is online trading safe. People who are not so internet savvy hesitate to buy stocks online. But actually, stock trading is so simple that any one can use it. If one knows how to read and write emails, buying stocks online is as easy. In this article we will see how easily one can buy stocks online. But buying stocks online does not start immediately. One must first complete few formalities with banks to start online stock trading. Know-how about stocks evaluation is also essential. Stocks evaluation is not so easy to learn. This is one big reason why less people are successful in stock investing. Important questions about online stock investing must be answered:
- How to buy stocks online?
- What is the process of buying stocks online?
- How to evaluate good stocks?
(1) How to buy stocks online
When people used to buy stocks through brokers, lump-sum investment was more prevalent. Every month people used to save money. As soon as decent savings got accumulated, people used to approach brokers for stocks purchase. But that process had some disadvantages. It used to take time to accumulate savings. Buying stocks through brokers also used to take few days. The disadvantage was not only time. It was not necessary, that when money is ready, that is the right time to buy stocks. And, when its time to buy stocks people may not have money for investing. But when we buy stocks online, timing the market becomes easy. If one cannot time the market, systematic stock purchase is another good option. Online stock trading facilitates investors to buy stocks systematically. Small amount of money can be diverted to buy stocks online. Investing systematically allows people to take advantage of dollar cost averaging. When share price is low more shares are purchased. When share price is high more shares are purchased. As a result, long terms results are averaged and optimized. Possibility to face big losses gets reduced in systematic investing.