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Stocks

Stocks

What are Stocks?

Stocks is the name given to the valuable documents given to the shareholders by the equity capital companies to document their shares and partnerships. In other words, it is also seen as one of the equivalent parts of a company's capital. Stocks also represent an ownership or partnership.

Stocks do not have a standard return and their value varies according to the company's balance sheet earnings and investment decisions. Institutions that can issue stocks are joint stock companies, limited partnership companies whose capital is divided into shares and institutions established by special law. Stocks, which are the most traded investment instruments of the stock market, are therefore very important for both investors and companies.

Important Things to Know About Stocks

  • There is no minimum or maximum limit for stock investment.
  • You need to have a good grasp of the factors affecting stock prices.
  • Speculative stocks bring high returns, yes, but they are also high-risk stocks.
  • Before starting the stock market, you should make sure that you have some investment experience.
  • Instead of a sector you do not know, you should choose the shares that belong to the sectors that you dominate or that you have an opinion on.
  • Stocks can be easily converted into cash; it is a liquid instrument.
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When to Buy Stocks?

Investors usually buy stocks when prices are falling and during stock market trading hours. It is important to buy stocks that are thought to increase in value and that can make a profit.

When to Sell Stocks?

With the decisions made by following the market, the stock should be bought when it is thought that it will appreciate by dominating the peak and bottom points, and the stock should be sold when it is thought to lose value.

How to Buy Stocks?

There are four steps to follow to buy stock, these steps are:

Selection of the Intermediary Institution

  • It is not possible to personally buy/sell stocks. For this, an authorized intermediary institution must be selected.
  • Many of the banks are authorized for stock transactions. Investment, finance and Forex companies that are authorized other than banks also conduct stock transactions.
  • In addition, when choosing an intermediary institution, the commission rates and costs determined for buying / selling transactions should be examined. These fees may differ from institution to institution.

Opening an Investment Account

  • After choosing a brokerage firm, an investment account must be opened in order to trade stocks through that institution.
  • An investment account can be opened by going to the branches of the selected brokerage houses, as well as through internet banking and mobile banking, and internet and mobile finance channels.
  • When opening an investment account, it is necessary to read, approve and sign the framework agreement and risk notification form.
  • The framework agreement contains general provisions that must be complied with between the investor and the intermediary institution.
  • The risk notification form, on the other hand, explains all kinds of risks before buying/selling stocks.

Funding an Investment Account

  • After opening an investment account through the selected brokerage house, it is necessary to deposit enough money into this account for the transactions to be made.
  • In addition to the fee for the stock to be purchased, the commission fee should also be taken into account.
  • Money transfer is made to the investment account opened from the bank via the current account using internet and mobile banking.
  • For investment accounts opened at intermediary institutions other than banks, information should be obtained from the institution for different payment methods as well as money transfer methods such as money transfer and EFT.

Placing a Stock Purchase Order

  • After selecting the brokerage house, opening the investment account and depositing money in this account, the last step is taken to buy the stock you have determined.
  • By logging into the investor account via the mobile application or website of the intermediary institution, the stocks that are traded in the stock exchange are displayed.
  • The current prices at which these stocks can be purchased during the session hours are displayed.
  • Outside of these hours, the last prices traded on the stock are displayed.

How to Sell Stocks in the Stock Exchange?

While following the market, the stock, which is determined according to the supply-demand balance and which is estimated to lose value by considering the factors causing sudden fluctuations, should be sold. A stock's bottom price is the point where the price is lowest. The peak price is the point where the price is highest.