Buy Stocks Online
To buy stocks, you first need a brokerage account, which you can set up in about 15 minutes. Then, once you've funded your account, you can follow the steps below to find, select, and invest in individual companies.
It may seem confusing at first, but buying stocks is actually pretty simple. Here are five steps to help you buy your first stock:
1. Choose an online stockbroker
The easiest way to buy stocks is through an online stockbroker. Once an account is opened and funded, you can start buying stocks through the broker's website within minutes. Other options include using a full-service stockbroker or buying shares directly from the company.
Opening an online brokerage account is as simple as opening a bank account: you fill out an account application, provide identification, and choose to fund the account by check or wire transfer.
Read: OANDA Broker
2. Research the stocks you want to buy
Once you've set up and funded your brokerage account, it's time to get into the business of stock picking. A good place to start is to research companies that you already know from your experience as a consumer.
Don't let data overload and real-time market volatility overwhelm you as you conduct your research. Keep the goal simple: the company you're looking to own.
Warren Buffett once said, "Buy a company because you want to own it, not because you want its stock to go up." He does a great job following this rule.
Once you've identified these companies, it's time to do some research. Start with the company's annual report—specifically, management's annual letter to shareholders. This letter gives you a high-level view of what's going on at the company and provides context for the numbers in the report.
After that, most of the information and analytical tools you need to evaluate your business are available on your broker's website, such as B. SEC filings, conference call transcripts, quarterly earnings updates and breaking news. Most online brokers also offer tutorials on how to use their tools and even basic stock picking workshops.
3. Decide how many shares you want to buy
You will never feel pressure to buy a specific number of stocks or fill your entire portfolio with one stock at a time. Consider starting paper trading and using a stock market simulator to get your feet wet. Paper trading lets you learn to buy and sell stocks with virtual currency. Or, if you're willing to invest real money, you can start small -- very small. You can buy just one stock to get a feel for what it's like to own an individual stock and whether you have the ability to get through it without sleepless nights. If you master shareholder bragging rights, you can expand your position over time.
Investors in new shares may also want to consider fractional shares, a relatively new product from online brokers that lets you buy fractions of shares instead of entire shares. This means you can get into expensive stocks with less investment. SoFi Active Investing, Robinhood and Charles Schwab are among the brokers offering fractional shares.
Many brokers also offer tools to convert dollar amounts into stocks. This can be useful when you have a fixed investment amount (say $500) and want to know how many shares you can buy with that amount.
Read: eToro SPAC
4. Select your warehouse order type
Don't be intimidated by all the numbers and meaningless word combinations on the broker's online ordering page. Check out this cheat sheet for basic stock trading terms.
There are many more fancy trading actions and complex order types. Don't worry now -- or never worry. Investors use only two types of orders to build successful careers: market orders and limit orders.
With a market order, you indicate that you will buy or sell a stock at the current best market price. Because a market order does not set price parameters for a trade, unless you try to buy a million shares and try to acquire a robbery, your order will be filled immediately and fully filled.
Don't be surprised if the price you pay (or get when you sell it) isn't exactly the same price you were told a few seconds ago. The buying and selling prices fluctuate constantly throughout the day. For this reason, when you're buying stocks that don't move much in price, it's best to use market orders -- large, stable blue-chip stocks -- rather than smaller, more volatile companies.