Many beginner investors want to invest in stocks because they have some extra cash in their account or they hear about a new company or product that is being released and are hoping to make some money off of it. Many beginner investors have these ideas of investing but do not know where to start. If you are one of these many people just follow the steps below and you will become a stock investor.
1. Decide How Much Money To Invest - Before you pick a stock or talk to a brokerage or financial firm you must first decide how much money you are willing to invest. It is important to discuss this with your significant other as there is a possibility you may loose all of this money. Once you have decided on a value stick with it. You may ask yourself what is the minimum that I can invest to learn about stocks before I get fully involved? I would suggest $1000. I suggest that because if you make a %10 profit on the stock that is a gain of $100 dollars. However keep in mind that the financial firm will take some of your investment and gain as a service fee, so you may end up with $85 profit.
2. Pick A Bank Or Financial Firm - If you have a bank that you are currently a member and like I always suggest choosing them. You can also choose Financial Firms that are only dedicated to investing such as E-Trade or Ameritrade. I prefer using a bank because I know that they will provide customer service because I use them for other purposes such as everyday use. I also have the ability to look at all of my accounts in one location. Additionally, banks have increased their investment capabilities as they now provide stock analysis, charting, and other services that originally made trading firms so popular.
3. Set Up An Investment Account - Once you have decided how much money to invest and what bank/firm you are going to invest with call them. Though almost every financial institution will allow you to set up an account online I always suggest calling to ensure you are receiving accurate information as to the rules for the account, trading fees, and other options. Most banks/firms will have a flat charge of $5 - $10 per transaction, and that is for when you buy a stock AND sell the stock. Some bank/firms offer bonus cash when opening an account and offer X number of days of free trading. It is also important to see if their is a minimum balance required on the account, or if there is a discount on the transaction fee if you make a certain amount in a month. Though it sounds difficult whatever establishment you choose can walk you through the process easily and transfer your money that day.
4. Invest In A Stock - So you know have an individual investment account with funds available for trading and want to buy a stock. After you have done your research (tips are in previous posts), on the website select buy stock. Most sites are the same at this point, you will input the ticker (short code) for the stock and how many shares you wish to purchase. Next you will be asked what type of buy you want, market, limit, stop limit, stop. I always suggest to buy limit as a beginner investment. A limit buy will place the trade if the price of the stock is below your limit value. Such as if your limit is $10.00, if the stock is below that value you will purchase it. Once you have selected limit and set your price you will be asked if the purchase is for day only, or good until cancelled. Choose good until cancelled if you are waiting for a stock price to drop before purchasing, but if you want to purchase at that exact time then choose day. Depending on the number of shares you will get the option to pick all or none. Choose all or none and also select do not reduce if available.
5. You Purchased A Stock - Congratulations, if you have followed the steps above you have purchase your first stock. Visit the site daily for stock updates, tips and guides for investing, and feel free to ask questions in the comments and follow me on twitter @blogilm to see what stocks I am investing in. Also make sure to check my current portfolio to see what I am currently invested in.