In an increasingly fluctuating stock market, those who decide to take their first steps in investing online are faced with many sites that advertise and highlight information that is often not really useful. Below we will see the main existing solutions to invest in the stock market. How can you build your portfolio with the most suitable and appropriate strategies? Let’s see in more detail how to do it.
Types of Investment: Direct and Indirect Purchase
Let’s start with a fundamental concept: what is an action. With the word “share”, in finance, we mean a financial security representing a share of ownership of a joint stock company, put up for “sale” through a specific stock market in a given period.
It follows then that a certain company divides among its shareholders, i.e. those who buy securities, part of its value, expressed in shares, making it to all intents and purposes the most popular and universally recognized form of investment in the world.
Purchases can be divided into two large macro families: direct purchases and indirect purchases. In the first case, direct purchases concern that type of operation with the aim of going to buy shares that are actually part of the business of the company, buying part of its value in a “direct” way. Indirect purchases instead, are those operations of buying and selling shares of a certain group (e.g. Indices, markets, company packages), where rather than choosing to invest in a single company, you decide to bet on more than one, thus going to invest, but this time in an indirect way, even on companies that are part of that particular group.
Where to Buy Stocks
There are various solutions with different methods to proceed with the purchase of shares online: through banking institutions, choosing a financial broker or through SIMs.
In the first case, by choosing a bank, one opts for the most historical and traditional channel, where trading was born first and which, before the advent of internet technology, was carried out exclusively in person or over the phone.
A second channel that is little used, in fact, in spite of the first, is that of SIMs (securities brokerage firms), which over time have replaced the old stockbrokers.
But the best known, most widely used and most technologically advanced channel is undoubtedly that of online brokers. The latter are real digital assistants who make available on their platform, very often in a completely free form, various financial instruments, through which to constantly monitor all the fluctuations, trends and movements of the market, in addition to buying or selling securities.
How to Choose an Investment Platform
But how to choose the most suitable broker for your experience and investment capital? And with what criteria Let’s start by saying that the solutions available today are really many, and if not approached with diligence and attention, they can turn into a real sea, where you risk to drift too easily.
Before you start you need to ask yourself a few questions.
- What do you want to trade on?
- How much capital do you want to invest?
- Is it a regulated broker and in Italian language?
- What are the real costs?
- How do you operate?
Although simple and sometimes trivial, in reality they are a fundamental step to be able to understand from the beginning which way to choose and which path to take, so as to be able to play in total safety and autonomy their investment operations.
The Best Online Brokers
Talking about the best online brokers, we can’t help but emphasize the importance that players like eToro, XTB and Plus 500 have today.
The first one, eToro, is a well-known platform that offers the possibility to buy stocks directly and without any commission cost for all trades. Its main peculiarity is that it was born as a social trading project, which is why it has one of the largest communities in the market, and has managed to evolve giving its users the possibility to even make medium to long term investments.
XTB also offers the possibility to buy and sell without any commission through an absolutely innovative platform, thanks to which you can manage very quickly (they declare only 85 milliseconds) your operations in a safe and secure way, relying on a fast and highly qualified support and over 5400 financial markets to choose from.
Plus 500 has some of the best financial tools in circulation, able to interpret and make the user interact, through highly professional and easily understandable charts, all the fluctuations and trends, analyzing the best situations to choose the right moment in which to act. Also here no cost of commission, thanks mainly to the spread compensation that is able to perform through the purchase/sale operations.
How to Buy Stocks: Detailed Explanation
Once you have chosen and analyzed your partner (broker, bank or sim), decided on the capital to invest and carefully studied the market, you can start buying and selling operations.
Choosing a broker, for example, you only need to go to the online platform, log in with your account after registering, choose the reference market where to invest (NYSE, NASDAQ, Japan Exchange Group, FTSE or others), and proceed to the next screen.
At this point the real purchase panel will open, that is a window in which to insert:
- The amount to be invested, i.e. the capital that you really decide to bring to make the investments.
- Insert stop loss or take profit, i.e. instruments able to stop losses or gains, according to a precise preset target (useful tool to lower significantly the risk threshold).
- Choose whether or not to apply leverage. Leverage is a tool that can increase the amount of capital actually invested by a certain amount, so you can gain or lose according to the value applied.
- Finally, once you have carefully made all the necessary choices, just click on the button to send the order, and you’re done.