Buying & Selling Stocks and Shares: What You Need to Know
Buying into stocks and shares is a regular way to build wealth. Historically, investing in stocks has provided higher returns compared to many other asset classes over the long term.
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The most convenient way to buy stocks and shares is via an online platform offered by a brokerage for stocks. The account opening process is made easy: filling in your personal information, uploading your proof of identity, and waiting for the account to be verified.
This is the traditional option. You buy the actual shares listed on stock exchanges and get a profit from stock price appreciation.
CFDs (contract for differences) allow investors to speculate on the price movements of the underlying asset. When you invest in stock CFDs, you don’t own the stock itself. Instead, you take a profit by going long in a bullish market and going short when the share price falls.
Selling stocks and shares is vital to all investors, as it is the last step of turning your investments into real profit, or loss.
Here are some common scenarios when investors often consider selling stocks:
If your investment has reached the target price or return you had set, it might be a good time to sell.
Setting a stop-loss order helps limit potential losses. If the stock price hits your predetermined stop-loss level, it might be time to sell to prevent further losses.
If there is a significant change in the company’s fundamentals, such as poor earnings reports, changes in leadership, or a shift in the industry landscape, it could be a signal to sell.
During market downturns or if you believe a market correction is imminent, you might consider selling to protect your gains or limit losses.
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