Compare brokerage accounts.
The most common way to buy company shares is by creating an online brokerage account, which will allow you to easily invest in the stock market. You don’t need to go through a human broker, which is how stocks were traditionally bought and searched for. Many banks offer brokerage accounts to existing customers, or you can opt for an online provider like E-Trade. Be sure to compare several different options and read all the fine print so you’re not surprised by trading fees, which can vary based on factors such as volumes purchased or sold.
Open a brokerage account.
Once you’ve decided which brokerage account you’d like to open, you’ll need to submit the required documentation and also set up a payment system to finance your purchases. Please note that many brokerage accounts require a minimum amount of funds that you need to initially transfer when setting up the account. Some common payment systems include using a check or linking your brokerage account to your checking account.
Research what stocks you would like to buy.
The next step is to think carefully about which stocks you would like to buy. Buying shares shows that you believe in the company’s growth prospects and management, so do your research before investing. Another thing to keep in mind is how to diversify your portfolio, which is one of the fundamental principles of investing. In other words, “don’t put all your eggs in one basket” when it comes to investing in the stock market. After you’ve established which shares you’d like to buy and how many shares of each company you’d like to buy, it’s time for the fun part: placing an order.
Make an order.
There are two main types of orders: market orders and limit orders. Market orders simply refer to purchase orders that will be executed at the current market price. However, because some stocks can change prices very quickly, the final executed price may differ slightly from the last quote provided. Meanwhile, limit orders give you a little more control. You provide the broker with a price quote, and the “buy” order is executed when the stock reaches that price in the market.
An option to invest in the stock market without opening a brokerage account
It is also possible, in certain cases, to buy shares directly, without opening a brokerage account. One way to do this is through an employee direct stock purchase plan (DSPP). A key advantage of a DSPP is that the fees are much lower than with a brokerage account. In some cases, you may not pay any fees. However, not all companies offer this option to their employees.
