Buying stocks might be intimidating, however, it isn’t as complicated as it seems. It needs research and a little bit of practice to learn the process, but once you get the hang of it, you are set to go.
1. Open an account with FlowBank
Stocks are bought and sold on stock exchanges, but you cannot buy directly from there. You must first open a live account. To do this simply go to the FlowBank.com website to get access to the market. You can apply for an account by filling in a registration form and providing proof of identification and a proof of address, then fund the account using a bank transfer. Once that is done, you can start buying stocks and other financial products in a few clicks.
FlowBank isn’t just here to provide a platform, we aim to support clients through their journey by offering educational tools too. On the FlowBank.com research segment, you can find daily news on what is going on in the markets as well as different in-depth papers, helping you reach your financial goals.
2. Research and choose the stocks you want to buy
Speaking of goals…FlowBank’s platform features more than 10,000 stocks, but that is not all. In total, you can have access to more than 50,000 financial products at the most competitive prices such as ETFs, CFDs, forex, commodities, options, and futures. It is easy to be overwhelmed, especially as a beginner, however you should keep in mind that when you buy stock, you're purchasing a piece of the company. So, a good place to start is to think about the firms and industries you're interested in.
Once you have identified these companies, it is time to get into an analyst’s role and review their annual reports to have a global overview of their financials. Moreover, what can also be interesting is to read the annual letter to shareholders which gives a general narrative of a company’s prospects and current situation.
After researching stocks and financial products, you can also think of an investing strategy that suits your needs. If you feel stocks should provide you a consistent stream of income, for example, you should look at dividend stocks. Consider growth stocks if you have a high-risk tolerance and are interested in early-stage growth enterprises these kids of companies can offer higher capital gains Filling your portfolio with value stocks, on the other hand, entails locating companies that are undervalued in the hopes of outperforming the market.
3. Decide how many shares to buy
To begin investing in stocks, you do not need a large sum of money. You can always start small and gradually expand your portfolio. Because investment returns are unpredictable, it's crucial to invest just what you can afford to lose and to be aware of your personal risk tolerance. You might also want to explore fractional shares, as it allows you to buy a portion of a pricey stock that you might not be able to afford in full. Thus, the amount you should invest depends on your goals, your willingness to take risk, and your desire to diversify your portfolio.
4. Execute trades and choose your order type
Now that your account is open, your goals and strategy are set, your research is done and you know what you want to buy and how much, it is time to act. Depending on the stocks you chose and in which stock exchanges they are, you must be careful about the different trading hours.
Also, setting an order type is necessary before buying a stock, here are two of the most important ones:
- Market orders: It indicates that you will purchase or sell the stock at the best available current market price with a market order. Because a market order does not specify a price range for a trade, it will be executed instantly and fully filled. A market order is best used when buying stocks that do not experience wide price swings or if you just need to act quickly
- Limit orders: A limit order establishes a specific price for your purchase or sale. Only if a seller is prepared to sell the shares at the price you specify will the order be executed and vice versa for short trades. Investors that use limit orders have more control over the price they pay for a security.
5. Build your portfolio
Building a portfolio is an ongoing process that becomes more and more intuitive as you gain experience and knowledge. Your investments decisions must always be questioned: are they becoming too risky? Is my portfolio well diversified? Is it too focused on a specific industry?
Moreover, you must keep up with the companies that you invested in, so when something bad or good is going to happen, you can evaluate if you need to react.
Once you're familiar with stocks, maybe try to explore other financial products or other investment strategies depending on what your goals are.
Investing might be overwhelming, that is why FlowBank is here to answer your questions and help you in your learning process. There is a demo platform where you can practice before starting your experience as an investor. Also, the learning center provides short videos that help you discover the trading platform and the different financial products. Feel free to contact us to arrange a meeting and set up your account!