Buy

DEFINITION of buy

Buy financial assets means taking ownership of it from someone else. Whether it is a commodity, stock or another asset.

WHAT IT IS IN ESSENCE

Generally, in the forex market, it helps to think of money as a commodity. When you buy a currency you hope that its value will strengthen compared to the currency that you are selling. Instead, the forex market is an interbank market, which means it’s all connected together in a network of banks and institutions. If you are going to buy a stock, then you will pay a price near the posted ask. The price will remain the same only when the bid and ask prices are exactly at the last-traded price. Market orders are popular among individual investors who want to buy or sell a stock without delay.

Often in trading, buying an asset will not result in taking possession of it in physical form. Buying can also be referred to as ‘going long’, depending on the security being traded. A buy recommendation is one of five ratings generally given by a research firm or broker. It states that the firm or broker believes that an asset’s price will increase in the near future. It is more positive than a neutral rating, also known as a hold rating, but less so than a strong buy. The other ratings are sell or strong sell.

HOW TO USE

Buying and selling stocks is something accessible to just about anyone. You can find brokerage services through full-service brokers, and some are even located in major retail banks. Many brokers exist either online or via brokerage phone centers. Being able to buy stocks is less problematic than knowing which stock’s shares will be your best investment. No one can predict the future, so every investor needs to understand the risks that come with every investment.

There are two options when buying shares, you can either:

– Own shares yourself; or

– Pool your money with other people in a collective investment known as a fund

You should invest in shares for at least five years. This allows enough time to ride out any bumps in the market that might see you make a loss on your money. If you know you’re going to need access to your money in this time, then perhaps investing isn’t the right route for you. And holding shares in just one company is high risk.