Investing in stock can be extremely lucrative if done right. If you do it wrong, you can end up losing a lot of money. There are multiple ways you can approach stock and if you want them to work out for you financially you have to do it properly.

This means a lot of time studying and ensuring that you put the right foot forward so that you know what to expect. On the other hand, for a hands off approach you can always look into managed funds.

Stock Market Investing For Beginners Essentials To Start Investing Successfully

Here are some of the common stock investment methodologies for you to look at and get started.

1. Stock Options

Stock options are a type of financial contract that give the holder the right, but not the obligation, to buy or sell a specified number of shares of stock at a specified price (strike price) within a specified time period. There are two main types of stock options: call options and put options.

Call options give the holder the right to buy shares of stock at the strike price, while put options give the holder the right to sell shares of stock at the strike price. The price at which an option can be exercised is called the exercise price or strike price.

Options can be used for a variety of purposes, such as hedging risk, speculating, or income generation. For example, an investor who owns shares of a company may purchase a put option as a form of insurance in case the stock’s price drops.

A speculative trader may purchase a call option in the hopes of profiting from a stock’s price increase. And an investor might sell call options as a way to generate income from their stock portfolio.

It’s important to note that options trading can be complex and risky, and it is not suitable for all investors. Before trading options, it’s important to understand the risks and mechanics of options trading and to consult with a financial advisor.

2. Common Stock

 This is the most basic type of stock investment. When you purchase a share of common stock, you become a shareholder in the company and have a claim on a portion of the company’s assets and earnings. Common stocks are considered to be more risky than bonds but also have the potential for higher returns.

3. Preferred Stock

is similar to common stock, but it typically has a fixed dividend and priority over common stock in the event of a company’s liquidation. Preferred stock also does not usually come with voting rights. Preferred stock is considered to be less risky than common stock but also has lower potential returns.

4. Blue-Chip Stocks

These stocks are from well-established, financially stable companies that have a history of paying dividends and are considered to be less risky than other types of stocks. They typically have a lower potential return than more speculative stocks. Stocks like BHP are a good example of a blue-chip stock. BHP, being a global resources company, exemplifies stability and is often sought after by investors looking for a reliable and consistent investment option.

5. Growth Stocks

These stocks are from companies that are expected to grow at a faster rate than the overall market. They typically don’t pay dividends and are considered to be more risky than blue-chip stocks.

6. Value Stocks

These stocks are from companies that are undervalued by the stock market and have the potential for significant price appreciation. They are considered to be less risky than growth stocks but also have lower potential returns.

To conclude, you now know what kinds of stock investment options there are for you. The key is in picking the right stock and making sure you’ve done a good amount of research on it. If you haven’t, you could end up losing money instead of accruing it.