How to buy stocks

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How to buy stocks
Do your homework before buying stocks

Buying stock in a company is relatively easy once you've researched the stocks you're interested in and have a broker or brokerage account to handle your purchase. Choose your stocks with care and research before you buy anything, but keep in mind that the stock market could crash at any time for numerous reasons.

Skill level:

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Things you need

  • Wall Street Journal
  • Personal Financial Software
  • Brokerage Accounts

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  1. 1

    Educate yourself fully about stocks before purchasing them. You can find information about stocks and brokers on the Internet.

  2. 2

    Determine what you want in a broker or brokerage account. Do you want to meet with someone face-to-face? Will you want to be able to reach someone by phone? Do you require Internet access? Is price your only consideration? Do you want to buy and sell only stocks, or would you also like to buy and sell mutual funds, bonds or foreign stocks?

  3. 3

    Choose a broker or brokerage firm to purchase the stocks on your behalf based on your needs. Need a lot of advice? Start with a full-service brokerage. The least expensive brokers may not offer advice. Fairly confident and want low prices? Try an online brokerage.

  4. 4

    Contact a broker or firm and request an application. Many firms offer online applications, although most require that you send a check or wire money to actually open the account.

  5. 5

    Deliver a check in person if possible to speed up the process.

  6. 6

    Begin buying and selling stocks once your account is open.

  7. 7

    Review statements you receive and reevaluate your portfolio's performance. Are you moving toward your investment goals?

Tips and warnings

  • Ask friends or colleagues for broker or brokerage-firm recommendations. If you don't have a personal recommendation, read ads in financial publications such as "The Wall Street Journal."
  • An online brokerage account is convenient and fast but can be susceptible to computer glitches. Ask if you will be able to make trades by telephone if need be.
  • Ask brokerage firms to list all fees. Watch out for hidden costs (account transfer, electronic transfer or handling fees).
  • It can take a few days to open a brokerage account, so don't expect to be able to trade on the same day you decide to open an account.

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