Why should a trader choose to trade shares?
Trading shares can offer the potential for significant profits. As the value of a company’s stock increases, traders can sell their shares at a higher price than they originally bought them, making a profit
Trading shares allows traders to diversify their investment portfolios. By holding shares of multiple companies across various industries, traders can spread risk and reduce the impact of individual company performance on their overall portfolio.
The stock market is generally highly liquid, meaning shares can be easily bought or sold at prevailing market prices. This allows traders to enter and exit positions swiftly, which can be advantageous for short-term trading strategies
Access to Publicly Listed Companies
Trading shares gives investors the opportunity to own a part of well-established, successful companies that are publicly listed. This is often not possible with private companies.
Some companies pay dividends to their shareholders, which represent a portion of the company’s profits. Dividend payments can provide a steady income stream to traders, especially those who prefer a more long-term investment approach.
Traders who are adept at analyzing market trends and company performance may engage in share trading as a means of speculation. They try to predict short-term price movements and profit from price fluctuations.