How To Invest In Stocks
Because of the way stock dealing in Arab countries works today, you can buy thousands of global stocks with the click of a button. All you need is an account with a trusted online stock broker.
Best of all, there are now hundreds of stock brokers in all Arab countries competing for your business, and fees and commissions have never been so competitive before. In fact, there are even stock brokerage platforms in Arab countries that allow you to buy shares without paying any transaction fees.
But, in addition to learning how to buy stocks in Arab countries, it is also very important to know the basics of how stocks actually work, the investment journey, and any tax rules or tax benefits. After you master the basics, you’ll have the best possible chance of avoiding costly mistakes. Most Important Stock Investing Advice: Once you buy shares in a company, it has to send you a Certificate of Participation within two months.
What are stocks?
When a company decides to go public, it means that it will be listed on the stock exchange. This, in turn, allows everyday investors to buy “shares” in the company. As the name suggests, you will own a “share/share” of the company you invest in, in proportion to the number of shares you own.
The value of shares is determined by market forces. In other words, if there are more buyers than sellers, the stock price will rise. And when that happens, the value of your investment will follow suit.
If there are more sellers than buyers, this has the opposite effect — meaning that the value of your shares will decrease. As a shareholder in the company, you will be entitled to a set of privileges.
Chief among these rights are the right to profit and the ability to vote at annual general meetings. You can sell shares at any time during standard market hours. The amount you receive in cash depends on the number of shares you hold and the company’s current share price. We recommend that you bookmark our stock terminology page while purchasing your first stock.
Ways to invest in the stock market
How do you start investing in stocks? It is possible to invest in the stock market either on an individual level directly or through investment funds:
Buying and selling stocks:
If you prefer to buy and sell shares individually, and rely entirely on yourself (you can always use an expert or financial advisor), you have three options for direct investment:
A financial advisor or investment manager, you can ask them to buy or sell shares on your behalf, and they will, of course, do so through a broker or broker.
Investing through an investment fund:
In a collective investment, many people put their money in an investment fund, and it is invested in stocks or other assets, such as bonds, cash investments, or investment property of the choice of a professional fund manager.
You can invest in mutual funds either through banks, a fund manager, a financial advisor, a traditional broker or an online broker.
Tips to avoid wasting money in the stock market
1- Do not use high leverage
Leverage is a strategy of using borrowed money to invest in specific stocks, in order to increase the potential return on the investment, and although the higher the risk in the stock market, the higher the returns, the higher the leverage, may lead to higher fees and losses as well.
Experts also advise using leverage with caution, and only risking money that the investor can afford to lose.
2- Don’t invest all your money in one asset
When a person invests all his money in one company, he not only increases the risk of losing it, but also misses the opportunity to earn more money, by investing in different industries, so experts advise investing money in a variety of assets, according to Arqaam Information Center.
3- Beware the market timing strategy
Many investors wait for the time when stock prices to rise or fall, to sell or buy, but the stock market is very volatile, and it is unpredictable what will happen, so investors rely on this strategy to miss a lot of opportunities.
4- Don’t buy stocks just because they made a profit
Lots of investors buy stocks when their prices go up, hoping they will go up again, and make more money, but just because a company made 12% profit yesterday doesn’t mean that it will happen again right away, the stock market is very volatile.
Experts advise investors to buy more shares when their price drops, and to keep the profitable shares for the long term.
5- Stay away from short-term investment
If a person invests his money in companies with a strong balance sheet, excellent performance record, and no leverage, he should keep his shares and not sell them, even if their price drops, because most preferred shares always recover.