Online stock trading is a good option for beginning investors. They can benefit from investing in shares of the fastest-growing international corporations. The task is to find stocks that will deliver the best returns to satisfy the investors’ goals. With strong analytical skills and good research tools, finding good-performing stocks isn’t as complicated as it might seem to newbies.
What is the stock market, and how does it work? Why should you invest in shares? How to do this efficiently? These and several more questions will be answered today, in this review.
Online stock trading with DotBig Forex Broker
To invest in stock means to buy a share of the company that is traded publicly on stock exchanges. Online stock trading is when a participant buys and sells securities online via the chosen stock trading platform. This process involves using specific trading and research tools, offered by a certain financial services provider.
When you invest in the stock of a company, you acquire ownership over its stake. If the demand for the company’s products and services goes up, more investors start trading the stock, and consequently, the price of the asset increases. This delivers better returns to the initial shareholders of the company.
How global events impact the stock market
Global events have always been affecting the stock market, both positively and negatively. Here is the explanation of 3 recent events that made the biggest impact on the stock market.
- The success of the vaccination campaign made a great contribution to the increase in stock prices of the biggest pharmaceutical companies. As of the date of writing, around 61% of the world’s population are fully vaccinated. The demand for vaccines increased the Moderna stock prices by 143%. The Pfizer stock also showed a good performance with its 43% growth.
- Throughout the previous year, China’s government has been introducing new crackdown o multiple industries. This affected the international stock market a lot since investors were afraid that these restrictions could affect the performance of the biggest Chinese corporations. They started selling their shares. The Alibaba stock, for instance, dropped from $228 to $105 in a year.
- Because of the rising inflation in the USA, the Federal Reserve was forced to increase the interest rate. Currently, the inflation rate is 8.58%. How can it impact the stock market? In a nutshell, it gets more difficult for the market to estimate the values of companies and their stocks. Because of this, the stock market becomes more volatile and unpredictable for investors.
Stock trading for beginners with DotBig
Looking for the option to start free stock trading? DotBig.com is one of the best stock trading companies, through which you can approach the assets of the biggest international corporations. To start online stock trading with the DotBig forex broker, you just need to open a trading account and request a demo account opening, if you want to gain some experience before investing real money. Use the advanced tools of the broker and benefit from its rich selection of stock market instruments.
Pros & Cons of Online Stock Trading
From the historic perspective, the stock market tends to provide good returns to investors. Nonetheless, similar to other asset classes, stock trading has both advantages and disadvantages.
Pros
- Earnings of the companies grow together with the economy. This means that online stock trading is a good way to benefit from economic growth.
- Through a live account registered on the DotBig stock trading platform, it’s easy to invest in stocks.
- You don’t need to put big amounts of money in stocks. When trading online, you can buy small shares of securities.
- There are two options to make earning. The first one is when you buy and sell stocks of fast-growing companies to get returns in short term. The second one is when you buy and hold securities of corporations that are expected to perform a significant growth in the future.
- The stock market has great liquidity. In simple words, traders can exchange their shares for cash any time they need.
Cons
- Investing always involves risk. If you put all your capital in a single company that cannot meet the expectations in terms of financial performance, you run the risk of losing invested capital.
- If a company goes bankrupt, the common stockholders are paid last.
- Online stock trading is a difficult competition, in which institutional and experienced traders can impact the plans and change the intentions of individuals.
Final Thoughts
On the whole, online stock trading is a good option to gain experience in investing. Although the competition might be tough, there are a lot of options, from which one can benefit. To make your experience more positive, always stay tuned to changes in the stock market and follow the news about the best-performing companies and securities.
