How to invest in Colombo stock exchange
As Srilankans we all know one of the best investment opportunity we have in our country is stocks. To invest in Srilankan stocks we must register ourselves in Colombo stock exchange and we have to choose a stock broker for maintain our transections. So from this article you will completely know how to buy a stock in Srilanka from scratch.
Choose the stockbroker
Stockbroker plays an important role in buying a Srilankan stocks in Colombo stock exchange. There are over 20+ stockbroker in Srilanka. Everyone have they own features and requirements to register with them. Without a stockbroker you can’t buy stocks. [Click here to know how to choose a stockbroker in Srilanka]
Open a CDS account
You have to open a Central Depository Systems (CDS) account before investing or trading in Srilankan stocks. CDS account is similar like a bank account we open for our stock deposits. But the procedure is little bit different. You can open CDS account with two ways. You can one it with the help of your stockbroker manually or register through CSE mobile app by yourself. [Click here to learn how to open a CDS account]
Learn how to buy stocks with your stockbroker
To buy a share you have to know some basic aspects. First you have to know about Srilankan stocks. If you have an idea about stocks, you have to choose the proper stock to invest. You can’t invest your money into a stock blindly. You have to do your research and fundamental analysis. Once you done all those stuffs, you can invest into that company. Once your CDS account registration completed, you can buy the shares from Colombo stock exchange. After that if you are a trader you can start doing trades, if you are an investor them you can invest into companies.
There are three different types of trading platforms in Srilanka (Atrad, Intellect, DirectFN). It will differ based on your stockbroker. Here it explained through Atrad platform for buying the Srilankan stock. In case you don’t know about this Atrad trading platform, [click here] to get more details.
To buy stocks we can choose either Market order or Limit order.
Market order
First you have to select the company which you going to invest in. Then you have to fill the details like action, quantity and order. Then confirm to buy the stocks.
The order will be filled with couple of minutes.
Limit order
First you have to select the company which you going to invest in. Then you have to fill the details like action, quantity and order. Then confirm to buy the stocks.
The order will be filled when markets hit the price level. To learn about order types [Click here]
Analyze and Manage risk
Once you get the stocks to your portfolio, analyze the performance it’s going through, the reports the dividend payments, the decisions they implement within the company to manage your risk. Even though you may did a research on the stock before buying it, but the things may go wrong in future, so you have to be aware of the future factors. After some period of time if you feel like things are not going as you planned, then it’s better to exit form it to avoid capital risk (Not panic sold)
( If you wish to Watch a cool video explaining this topic – CLICK HERE )
Author’s disclaimer
Investing in stocks is not a onetime thing. You have to invest over and over again in a constant timeframe to make advantage of market fluctuations and speculations. And consistency leads to the compound growth and you can get the full potential advantages from stocks. Always seek advices from experts in the field to get more important trend updates to manage your risks. (Signup our newsletter to get important trend updates) Never ever invest your life savings or any emergency funds. Always don’t invest the money which you can’t afford to lose.