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Tips for investing in stocks

There are a few helpful research tips you may want to consider before you delve into the buying and selling process of trading stocks. It's essential that you also seek legal counsel on what your legal obligations and rights are when buying and selling stocks. Certain situations, such as insider trading, can prove to be costly and could jeopardize your business interests.

Consulting with business lawyers experienced in the complexities of reviewing financial agreements and corporate transactions will allow you insights on any legal questions or concerns you may have.

As outlined on an RBC overview article on stocks, there are three steps to consider when choosing stocks for purchase: identifying what stocks interest you, researching those companies and then determining what price points work best for you. Many banks will be able to assist you with this research, as well as be able to provide you with the tools necessary to make sure you are able to access and track this research on your own as well.

Stocks allow you to gain profits based on how well a company is performing in terms of earnings. If the company is doing well, your earnings - called dividends - would do well also. But the same logic applies if a company is doing poorly. Your dividends may end up being much lower than what you expected to earn.

The key takeaway for managing your stock portfolio is to make sure you understand the risks and to remain informed on current securities laws - from both a business perspective and from a legal perspective as well. It's better to identify risks sooner rather than later and identify how to mitigate them early than to discover them later and face greater financial setbacks.

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