A Beginner’s Guide On How To Buy Stocks

Published on 06/22/2021

The idea of investing in stocks may sound complex and somewhat confusing. But the truth is, the stock market is not that difficult to conquer. Before you jump into this kind of venture, one of the most important things you will need to help you out is a good amount of research. Still slightly skeptical on the concept? Did you know that Stock market investments have proven to be one of the best ways to grow long-term wealth and make for a better future? The investment world has a lot to offer, which is why you should take advantage of this and start investing as soon as possible. Follow this valuable, step-by-step guide to help you buy stocks.

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A Beginner’s Guide On How To Buy Stocks

Select A Stockbroker

First things first, the easiest way to buy stocks is to get an online stockbroker. Its always recommended that you choose a brokerage platform that is easy to navigate and user-friendly. Creating an account involves setting up a bank account, from here you can buy stocks within minutes and then fund your account. However, if this method doesn’t interest you or feel it’s a bit complicated as a beginner you can also buy stocks directly from companies.

Research The Stocks

Another super helpful tip that many people benefit from has to do with research. If you do not dedicate time to do the necessary research required, your money is as good as gone. Don’t let the huge amount of information and data overwhelm you, take it one step at a time. Keep the objective simple: you’re looking for companies of which you want to become a part-owner. Additionally, you should research different companies you already know from your experiences as a consumer. All the research that you perform will inevitably help you predict which stocks will perform in the long run.

Decide How Many Shares You Want To Buy

With this next step, there is no pressure! For beginners, it is recommended that you start small and over time build up. For someone who is just starting out, one stock is enough. As you become more comfortable and familiarize yourself with market tools and patterns, you can begin buying many more shares. The amount of money you want to invest in each stock will also help you make a decision.

Choose Your Order Type

Next, once you’ve bought your stock, you then need to decide what your order type will be. You have two choices; Market Order or Limit Order. The first one means that your stocks will automatically be sold at the best market price, without any price parameters, while the latter option means that assign a price for your stock at which trade is completed. Both order types have their advantages and disadvantages, and as we said before, it’s better to get an overall understanding before you make a selection.

Build Your Portfolio

The final step in this process is to build your investment portfolio. Once you have a brokerage account and know the basics of how to buy and sell stocks, you can keep adding money to your brokerage account and investing in stocks you wish to own in the future. However, it’s very important to know that even experts in the industry experience rough patches.  We strongly suggest that you continue to do as much research as possible throughout the process in order to improve your portfolio.