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Long gone is the time when to invest we had to go directly to the bank branch and give the order that we wanted to invest in the stock market and asked to be moved by the Ibex. Today it is very common for people to manage their own investments and in this article we will explain several basic concepts that you should know. You can go for the IG Review look at more info and come up with the solutions now.
I want to invest in the stock market, how do I start?
The first thing we must know is that to invest in the stock market it is necessary to have an intermediary or a broker that gives us access to the market. A broker is an authorized and regulated entity responsible for buying or selling financial products from us on our behalf in exchange for a commission. The online brokers today are an option to consider as their operational and commission allows us to manage our finances efficiently.
Where should I invest?
There are many financial products that we can have access to, such as stocks, bonds, options, futures. However, when we invest, it is important to know the different risks of financial products since we may be exposed to unnecessary risks if we do not know how they work. Another important point to keep in mind when we decide to invest is diversification, which is, not putting all the eggs in the same basket. Choosing a broker that has access to markets worldwide is important since we will have a greater range of products that allows us to diversify.
What main expenses do I have when I go to invest?
This section is important to review since investing with a broker with high commissions can harm us in obtaining a higher return on our investment.
Purchase or sale commission: this is the main commission that we will face when we invest and is normally applied when we buy and when we sell a financial product. Online brokers normally offer fewer commissions, an example of which is the online broker.
Custody commission: it is a commission for keeping the values in the account. Some brokers no longer charge it or depending on the number of operations it may vary.
Stock fees: in the case of the stock exchange, a fee is charged for operating in securities. It is important to know if our broker has the stock market fee included in their purchase or sale rates or if it charges it additionally, since we may have surprises.
Recommendations to find a good broker
Make sure that the broker is regulated: this point is very important since in this way we make sure that in case something goes wrong we have a place to complain. In this way we can avoid the so-called ‘financial bars’ and not expose ourselves to problems.
Access to a multitude of products and markets: As we have previously commented, a broker that has a variety of products will allow us efficient diversification and reduce the risks of our portfolio.
Low commissions: commissions weigh down the result of our portfolio and therefore it is essential to find out how much the entity will charge us to operate and if it has any hidden expenses to avoid surprises.