Investing in shares

If you are planning to invest in share market, you need to have a proper planning and strategy, so that you can make profit. As a beginner you may lose some funds, but make sure that you don't lose much. So the first thing I'd personally suggest is to keep watch on stock market for few days so that you can judge for a profitable share. Check the ups and downs in the face value of shares for different companies. You can also invest on dividend stocks.

Dividend stocks are those which pay a yearly dividend apart from profit that you make by selling. Generally, on holding a share, you can advantage from profit of the company and dividend. Dividend is a part of a profit distributed by the company. Say a company distributed 50% of the profit as dividend. So if the profit of a company is 1 crore in 2006-2007, Rs 50 lakh will be distributed as dividend and will be divided by the number of shares that the company has.

Now the question is how will you start buying shares? There are two ways to purchase share.

1. Using a brokerage: The is a most common method of buying share by using a brokerage.

2. DRIPs & DIPs: Dividend reinvestment plans or direct investment plans are plan by which Individual companies allow shareholders to purchase share directly from their company. Its a great way to invest a small amount of money.

Now you can go ahead to check stock market status and plan to invest in shares.