Thread: Learn How to Invest in Shares with AtoZMarkets

Wondering how to invest in shares? One of the most recommended approaches to wealth creation is to invest in stock market.

Investing in stocks can be a great way to increase your wealth. Anyone with access to a computer or smartphone and a little cash aside can do so.

Of course, every time you invest online, as you can multiply your money, there is a risk of losing it. This risk is not only based on market fluctuations but transaction costs that can significantly reduce returns.

In this guide, you will find everything you need to know about how to invest in shares. We will explain how to buy, own, and sell stocks, including the cheapest ways to buy and tips for new investors.

Lets get started!

Know how to invest in shares market
Learn How to Invest in Shares with AtoZMarkets
The first and foremost step on how to invest in share market is to understand what it is.

What is a stock?
A stock is a share in the ownership of a company. Once you buy shares of a company, you become one of its shareholders.

If, for example, the total number of Apple shares was 1,000 and you bought 300 then you would be a shareholder who owns 30% of Apple and is entitled to vote at its annual meeting.

More importantly, it gives you the right to participate in the profits. If the company has profited at the end of the year it can pay dividends, ie payments made to shareholders depending on the number of shares they hold.

Also if the share price increases, the same goes for the value of your shares.

Why would a company sell its shares?
As companies grow, they often need to raise money to fund the next phase of their projects. One way is to borrow from the bank. Another way is to sell shares through a process called IPO (Initial Public Offering).

The advantage of selling shares is that the company does not have to pay interest or repay the debt.

The main place where shares are bought and sold are the stock exchanges (more on that later) but also through private agreements.

The majority of the world’s largest companies are listed on a stock exchange with their shares being traded in public.

Some examples of popular Shares:

Apple Tesla Facebook
Amazon CocaCola Netflix
Alphabet Google Johnson & Johnson
Alibaba Square Walt Disney


What is the stock market?
The stock market is a place where investors can trade, that is, buy and sell company shares.

The shares are traded on dozens of stock exchanges around the world, such as the London (FTSE 100) and New York (S&P500). Each company can choose in which stock exchanges its share will be traded.

How do I make money from the shares market?
Learn How to Invest in Shares with AtoZMarkets
Once we have learned what a stock is, the next step is to see why everyone wants to get it, which is nothing more than putting money in it.

If you own a stock you can make money from it in two ways:

by increasing share value
through regular dividends
Increase in Share Value
The first way to make money from stocks is if their value increases.

How does the value of a share increase?
Take, for example, the Tesla stock (TSLA) which has been at the forefront of stock market news in recent years.

If in January 2019 you had chosen to buy 100 shares of Tesla while each cost $61.40 then you spent a total amount of $6,140.

A whole year passes and January 2020 comes with the Tesla shares now worth $130.11 each.

Now, the initial capital of $6,140 that you had invested is worth $13,011, so it has increased by $6,871.

So, to secure this $6,871 profit, you need to sell your Tesla shares in January 2020.

What will you do, though?

What is the right choice?

Will you choose to sell them or keep them?

If you had chosen to hold Tesla shares for another year, then January 2021 would find your portfolio worth $88,020, as the share price surged to $880.02.

On the other hand, however, there is no guarantee that their performance will continue to be positive in the future.

In a different scenario, the Tesla stock could have returned to the levels of January 2019 or even lower and you would have missed the opportunity to liquidate the profit of January 2020.

So when should you sell and when should you buy?

Sounds like a difficult decision, eh?

And it is!

The truth is that it is and no one can give you a valid answer.

The only thing you can and should do is to have built an investment strategy from which you will not deviate.

It will constantly guide you and give you the answers to these dilemmas that will arise constantly.

Regular Share Dividends
The second way to make money from shares is through the regular dividends that companies distribute to shareholders.

What are dividends?
Think of the dividend as a payment of a certain amount of money from the company to you for each of its shares that you hold.

Dividends are usually distributed by companies that are highly “mature” and “established” for years in the market without much room for growth.

They can be considered as a “thank you” from the company to its shareholders for the preference and support they provide.

When are dividends distributed?
There is no commitment as to when the dividends are distributed by the company and each is free to choose the dates and the frequency that will do so.

Usually, they are distributed per month, 3 months, 6 months, or even annually.

Why are dividends important?
Dividend payments are a realistic way to earn passive investment income as all that is required to receive payments is to own shares.

There is a whole class of investors who successfully “chase” shares of companies that regularly and high dividends and build entire investment portfolios with them.

Many of them have managed to replace their daily work and survive with the money offered to them by the dividends they receive.

Sounds great, but is it true?

The truth is that in order to earn a respectable monthly amount through dividends (especially to be able to support you), you have to invest very (very) large sums of money.

Before we proceed further, we’ll summarize what we’ve explained so far on how to invest in shares for beginners in the video below.



Before investing in shares, do not forget the five golden rules
The higher your hunting performance, the more risk you usually have to take. Remember that the value of an investment can increase or decrease and depends on many factors;
Do not put all your eggs in one basket. Try to diversify your investments as much as possible to reduce your risk exposure;
If you want money in the short term, you better not take too much risk. It is recommended to invest for several years. If you can not, it is better to put your money in a savings account;
Check your investment portfolio regularly. The situation and the market may have changed since you first invested but do not panic. Do not make hasty moves just because others do;
Do extensive research before you decide to invest. If you do not understand how some type of investment works and its risk, then it is better not to invest or turn to a professional investment consultant.
5 simple steps on how to invest in shares
5 simple steps on how to invest in shares
Decide how much money you will invest in share market
First, the stock market is not a place for money that you may need for the next five years, at least. While the stock market based on historical data is growing in the long run, there is uncertainty in stock prices in the short run. Take for example the financial crisis of the last decade or the coronavirus crisis.

It may be much better to save for an emergency or to pay off your debts. You can read in detail here how to make your budget and use the 50/30/20 system to set the right priorities.

Suppose now that you have distributed your money accordingly and have decided to invest in stocks. The next step is to open an investment account.

Open an investment account
To invest in stocks you must open an investment account. These accounts are offered by organizations that act as brokers, such as banks, online investment platforms, applications, and investment consulting firms. There is no limit to how many accounts and which broker/platform you will use. You can combine your investment goals accordingly.

The process is simple and can usually be done online. But there are some things to consider before choosing a broker.

Access to stock exchanges and stock exchange products
Almost all brokers/platforms can offer you access to the world’s largest stock markets and basic stock trading. The differentiation comes if you want to invest in non-widespread markets, such as the Athens Stock Exchange, and in specialized stock market products.

Transaction and portfolio maintenance costs
One of the most important factors to consider when choosing a platform is the charges. These charges can greatly reduce your returns, as evidenced by years of research.

The main charges to look out for are:

Commission for the purchase/sale of shares: You may be charged a commission for each transaction you make. The commission can be a fixed price, a percentage on the transaction, or a combination

Account Billing/Portfolio Maintenance: As above, some brokers may charge a fixed or scalable amount for access to the platform. In some cases, you can avoid this charge depending on the number of transactions or the size of your portfolio.

Stamp duty and other taxes: These charges may be the same for all platforms, depending on the country on which each stock exchange is based.

Other charges: You may be charged more if you want to access additional services, products, market news, transactions in other currencies, etc.

The choice of platform in this case should be made based on the frequency and amount of transactions you intend to make.

For more such informative and insightful articles, you can have a look at AtoZ Markets.