How to buy shares
Wednesday, July 1st, 2009Shares can only be purchased through a stockbroker and that means that the first thing you need to do is prior to investing in shares is to decide on the type of broker you want. You may also have to figure out a style of dealing, this could be through the phone or via the internet as most investors currently do.
If you’re the busy type with no time to trade, then you can decide to go for stockbroking service offering full advisory services. With stockbroking service, a broker will analyze your individual situation and develop a plan to march your investment needs.

The broker will also watch over your investments and offer suggestions on how and where to buy shares and selling too. There is a variation of this, commonly referred to as “discretionary service” here your stockbroker may purchase and sell shares on your behalf without your consent. It’s a highly customized service and sometimes very costly.
If you decide to buy shares on your own, then an online stockbroker account could be a convenient option. Share trading over the internet is often quick and cheaper than phone dealing, besides involving less paperwork. If you decide to trade shares over the internet, selecting the right account is a matter of utmost importance. Trading with the right account could save you hundreds of dollars on trading costs. Active traders making regular trades will often require different accounts from small infrequent traders. Below is an example to illustrate the above points.
If you’re an irregular trader, dealing in small amounts of stocks, then buying shares in batches is highly advised; in this case your online broker will collect your order and purchase the shares at specified time rather than buy them in real time. The drawback with this method is that the fluctuating nature of share prices may affect the price you get, it’s probably the most affordable method.
If you’re a frequent trader dealing large amounts, then pay attention to your stockbroker’s fine print to stay informed about the fees charged. Frequent traders are better off looking for companies with lower, flat fees. Note that larger transactions could be expensive since they involve takeovers and mergers levy in addition to the stamp duty.
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