Learning About Share Buying For Beginners

Picking which stocks and shares to buy for beginners can be nerve wrecking but it need no be so. Buying stocks does not equate to gambling where you can lose everything in one round. Taking the time to learn proper way to evaluate stocks and shares is more important than rushing in on a hot tip without knowing anything.

If you are not sure about the performance of a particular company, resist the urge to jump in their the rest of your peers and wait for a better time to buy shares. Learning to buy stocks and shares for beginners can be very time consuming initially but the time spent on educating yourself will pay off many times in the long run. Once you find your own winning patterns in identifying good stocks to trade in, you will start to see how rewarding beginner stock market investing really is.

For your first purchase while learning stocks and shares for beginners should be from a company you know well enough. Check whether it meets the following four criteria as a rough gauge on whether it is a good stock buy or not. Firstly, if the shares are trading at $100 now, I suggest looking at another company since it is too expensive for a newbie.
Check out the Year’s Move indicator which tells you how much has the prices grown over the last year. This is a good measure of the company's management goals for the current year.
Next is the Dividend Yield which states the percentage value of each share that the company pays to shareholders. If you are into day trading, this is probably not so important for you although those who wanted to learn buying stocks for long term investment and income will be. Some companies do not pay dividends, although these will still be attractive if they show higher price growth. This is because money that is not paid out to shareholders can be used to expand operations and improve profits for the company, which makes it more valuable.
Finally, the famous Price/Earnings (P/E) ratio is computed by dividing the share price by how much the company has earned in this financial year. A lower Price/Earnings ratio indicates that the company’s stock is currently valued at a good discount although this figures can be very dpepdent on the type of industry. A high P/E ratio means that investors are projecting that the company has a lot of growth potential although the actual earnings are still lagging behind.