THINGS TO LOOK FOR WHEN BUYING SHARES

Whenever you want to buy share/stocks, there are certain things or information you need to fins before buying. Some of the of the few most important things you need to consider are discussed below.

1.KNOW WHAT YOU ARE LOOKING FOR
   Primarily people/investors buy share to receive an income. this income comes in the form of dividends. For a high income, choose company that pay high yield and compare it with others in the sector. You can work out the yield by dividing the dividend paid by the price of the share. Example if a company's share price is $100 and the the dividend paid per share is $10, then by calculation the yield is given by1 10%

2. DECIDE WHAT LEVEL OF RISK YOU CAN ALLOW
    Before buying shares, you need to decide the level of risk you are prepared to take. Are you prepared to accept shares that don't carry too much risk or are you prepared to accept higher risk in return for the prospect of higher returns.? Shares in general are viewed as moderate risk as compared to other types of mainstream investments. One therefore have to consider the level of risk he/she is willing to take.

3. KNOW THE COMPANY
    Knowing the company may sound simple but many investors do not know what business their company is in. Companies quoted on the stock market are sorted into sectors to give a broad idea of the company's main activities. News papers can list their share information by sector so it may be easier for the public to see which sector a company is in.

4. BE ON THE LOOK OUT
    Many things will affect the value of the shares you own. It's therefore difficult to factor every possibility into every decision and even harder to keep an eye on all the things you'd need to be aware of. One thing to do is to think about the impact of things you read or hear about in everyday news. Example a higer oil price should have a positive effect on the the price of oil companies. But it will hurt a company like the airlines whose fuel bills will increase.

5. DO NOT PUT ALL YOUR EGGS IN ONE BASKET
    Spreading your money across various companies  helps reduce the overall risk. Not every investment decision you make will produce the desired result. Therefore spreading them evens out the odd. Diversity means investing in different sectors too. Diversification therefore helps to reduce risk.

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INVESTMENT IN STOCKS

Shares/stock investment is very valuable for those who wants to have a good financial future. Like I did mention in my previous post it is muchgood and better to invest when you are young. Let's go through stock and what it really is that makes the rich more richer.

First of all shares or what some peopl term as stock represent ownership of a company. What it means is that, when an individual buys shares in a company, he/she becomes one of it owners or part owner of the company. One who buys shares of a company and is therefore part owner of the company is known as a shareholder. Shareholders choose who runs a company and they take part in decision regarding the company for the success of the company.

Shares are most obviously associated with the stock market. Stock market in simple terms should i say a place where shares are listed and buying and selling of shares take place there. Most businesses issue shares in their company in return for a lump sum investments. This investments may either comes from friends and families. Other businesses an a larger scale issue shares by making it public, offering it to all and not only limited number of people. They do that in other to raise huge capital and to grow their businesses.
The first time of offering the shares is normally referred to as IPO(initial public offer). These investors are willing to put capital, either large or small for a share in a growth business.

The advantage of raising money in this way is that you don't have to pay the money back or pay interest to the investors. Shareholders instead are entitled to share of the distributable profits of the company, known as dividends. Shareholders can also sell off their shares to acquire the capital gain that is their input capital or even more than that.

INVESTMENT

Investment has been seen as the greatest source of finance for the rich people. It has also been seen as the key opportunity to the inexperienced. Because of this, the western standard of living continue to improve more and more individuals start to recognize the advantages of investing. They have also recognize the advantage of investing even if with a small capital. Introducing investment will help you get started in the right way.

            INTRODUCTION TO INVESTMENT
Investment as defined by MACMILLAN ENGLISH DICTIONARY 'is money used in any way that earn you more money` for an example money used for buying property or shares in a company. Also investing is the process of spending money in order to improve something or make it successful. In the not shell placing your money in some sort of investment is a method of taking a predetermined amount of money and utilizing it in a way as to improve its original value and making a huge return at the long run.           

Since the reason why you want to learn how to invest is to generate profit, the reason for your investment should be more important since it will affect how much returns you can earn. It will also determine the risk level you are willing to take.
Before we go deep into investment, let answer some questions pertaining investment.

• WHAT IS AN INVESTMENT?

In general, any activity that is done today but which yield profit at a later date can be said to be an investment.
Investment involves postponing your consumption today in order to put your savings to work.

• WHO IS AN INVESTOR?

An investor is anyone who decides to put part of his/her funds/savings in an investment for future benefit. For an example: A man who has decided to use 5% of his monthly salary to buy shares can be described as an investor. An investor has some characteristics including investment objective, and expectation of return and money to invest.

• WHEN CAN YOU START INVESTING?

The best time to start investing is NOW. The younger you are, the longer the time you have to invest.

• WHY INVEST?

Investment is a necessary condition for creating wealth. Investment helps in realizing one's dream such as buying a car, house or paying for your child's education in the future.

• INVESTMENT HORIZON.

Investment time horizon refers to the period of time an investor is prepared to wait for his investment to mature. the investment time horizon is determined by the investor. For example a young man may have $10 million today to invest and would want it back in four months time while a young lady may have the same amount of money to invest and may want it five years time. In this case the young man has a short-term investment horizon while the young lady has a long-term investment horizon. 

• BENEFITS OF INVESTMENTS.

There are several benefits to be derived from investing. The obvious benefit is the profit that accrue on an investment. For instance when you invest in shares, you can earn dividend/or capital gain. Dividends are the portion of a company's profit that are distributed to shareholders during a particular financial year after they have been recommended by the directors and approved by shareholders. Capital gains refer to the difference in the price at which an investor buys shares and at which he sells them.

 When learning about how to start investing, you need to take into consideration the amount of money at your disposal. A student may decide to invest $30 while a businessman might invest a million dollar but both will look for a return on their expenses. If you would want to invest to secure a good financial future you should be ready to manage the risk involved to secure higher returns on investments. Be aware that investing will not permit you to withdraw your money instantly.

 In general, investments are categorized as low, medium and high. Investment with low risk include savings account and government bond. Medium risk investment on the other hand include certain types of property or share, while high risk investments are made up of shares from fast progressing and expanding companies exploring new markets.

 Before embarking on investing, take advantage of online and offline resources that can provide introduction to investment. You can also consult an independent financial expert or adviser to walk you through the entire process.