This article is related to my previous two articles ‘Investing your profits’ and ‘Doing research on safe investments ’. Now that you have done the preliminary preparation and research, it is time to invest.
It is advisable to invest in different sectors. Do not invest all your money in one sector or one company. Main reason for this advice is due to certain circumstances, if one sector goes down, you have other sectors that are secure. Your research will now tell you what companies you should try to invest. Allocate certain amount of money for your investments from profits. Try small and when you are an expert in this field, you can start big.
Select your preferred ratio limit. Companies within that limit will appear. Look at the prizes per share and think what shares are worth buying for. For example if you buy some shares in a number one company for a big amount per share, you can only buy very few shares and you will have to pay a transaction fee. Your expenditure for investing in shares will be the amount you spend to buy the shares plus the transaction fee. If you buy Thirty five shares for thousand dollars plus transaction fee; you will have to wait for a long period to reap the profits because when you sell your shares also, you will have to pay a transaction fee. If you calculate this, it will show you whether you are going to get a profit or loss after your targeted years for the investment. So think about companies with low share prizes where you can buy at least thousand shares.
Share prizes rise and fall due to various reasons during certain months. This might be because of the factors affecting certain industries. Companies paying dividends usually lower their share prizes after paying dividends. In the company information, you can find the dividend date listed if the company pays a dividend. This is a good time to buy. Indicators also predict the likely fall in value of a share. Target this time and quote for a possible low prize what you think a share value is likely to fall. You can cancel your order at any time before the transaction takes place. Once the transaction is done you cannot take it back. You can give your broker the option of direct debit and credit to your account or transaction via cheque. According to your instruction your broker will do the transaction and will inform you by a receipt. Keep the information of the transactions you make in a separate file well organized because you will need them for tax purposes and they are the written material that you need to assess your shares worth.
If a company pays a dividend they will have two options for you. You can have either your dividends re-invested or paid to you every time they pay their dividends. If you are investing for a long time, it is worth to opt for the dividend re-investment scheme. Some companies give you special prize reductions and benefits for dividend re-investments. Meaning of dividend re-investment is; that you invest your dividend in some more shares of the company. For example: if your dividend amount is twenty Dollars, and the company share prize is ten Dollars, the company will invest your money in two more shares. So the numbers of your shares grow and so is the worth of your dividend.
You can calculate what is best for you according to the amount you invest and the tax you have to pay for dividends. This might vary according to your needs and preferences.
Invest in different sectors like real estate, Industrial, Mining and mineral, Banking and Insurance. Always keep a vigilant eye in the sectors and companies you have invested. Listen to Finance reports and read financial reviews. Companies will send you their financial reports. But you have to be an independent observer. You are the person who is investing and you are the person liable also. Reward is, you gain your independence in choosing your own companies according to your needs whether they are long term or short term. If you invest in mining and mineral or companies that rise and fall rapidly, you have to keep an every day watch out. This way you can reap a quick amount of cash when you need instant cash.