"Stocks, How Do You Do It?"... A Beginner's Guide to Stocks for 'Joorini'

[Asia Economy Reporter Jang Hyowon] Recently, as the KOSPI surpassed the 3000 mark and the stock market showed a bullish trend, more people have become interested in stock investment. However, it is not uncommon to find people who do not actually know what 'stocks' are or how to invest.

So, we have prepared this. It is a basic guidebook for those who do not know even the basics of stocks but are full of passion to start investing.

Stocks are certificates that represent ownership in a company. If you own one share of stock, you have voting rights at the company's important decision-making meetings called 'shareholders' meetings.' It works like a voting right: owning one share gives you one vote, and owning 100 shares gives you 100 votes.

Companies receive money from people and give them stocks in return. This money becomes the company's capital. Therefore, the person who provides the most capital to the company, that is, the one who holds the most shares, is the largest shareholder. The largest shareholder can exercise the most voting rights at the shareholders' meeting, thus holding management control.

The stocks traded in the stock market are those that the company has already sold to someone else for money, and investors trade these shares among themselves. This means that buying a company's stock on the stock market does not immediately bring money into the company.

However, if investors believe the company will improve, they will buy more of its shares, and according to the law of supply and demand, the stock price will rise. This is how investors make profits through capital gains in stock investment.

Of course, some companies pay 'dividends' to investors who hold their stocks annually or quarterly. Dividends are the portion of the company's net profit distributed to shareholders. For example, Samsung Electronics paid 78% of its total net profit last year, amounting to 20 trillion won, as dividends to its shareholders.

In Korea, the main markets for buying and selling stocks are the KOSPI and KOSDAQ. Not every company can trade stocks in these markets; only companies approved for listing by the Korea Exchange can trade on the KOSPI and KOSDAQ.

To trade stocks in the market, you must first open a stock trading account with a securities firm. When choosing a securities firm, you should review various services, but it is good to first check how much the transaction fees are. Recently, some securities firms offer free fees if you open an account non-face-to-face, so you should carefully examine these options.

Once you have opened an account, you can trade stocks by installing HTS (Home Trading Service) on your personal computer or MTS (Mobile Trading Service) on your mobile device. HTS and MTS provide a wide range of information, from stock trading to various news, company information, and supply-demand trends.