How to Invest in Stocks

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Want to buy stock in a company? That’s great! Investing is an important part of building your net worth.

This tutorial covers how to invest in stocks for beginners using a discount online financial service (or brokerage) firm. You can click here to open up a free account, or check out some other links we’ve provided below. You can use an online firm instead of dealing directly with a stockbroker or with the individual companies, and having an account gives you the opportunity to invest in stocks, mutual funds, and more.

Your first step is to open up the account and deposit the amount of money you would like to invest.

Next, you will search for the stocks you’d like to buy in the list of stocks available for sale. Here’s what a stock quote looks like. It shows that it’s selling for about $25 per share, so if you have $500 in your account, you can buy about 20 shares. Depending on your brokerage firm, you will also have to pay a one-time commission fee for the trade, which will be about $7 – $10 dollars.

If you’re going to buy the stock and hold it, you’ll probably want to place a “Market” order. This means you will buy the stock immediately at the best available current price. Next you’ll hit “Preview” to make sure the order is the way you want it, then click “Place Order.”

That’s it! You’re done. The brokerage firm will execute your trade, and you will get a confirmation, usually later that day.

Here are some guidelines to follow when you’re buying stocks.

1. Only use funds that you’ve set aside for investing. While trading stocks is investing, not gambling, you’ll need to understand and be comfortable with stock price fluctuation. In other words, don’t invest money you need to live on.

2. Do your research. Don’t feel pressured to make a stock trade until you’re ready. Online brokerage firms will provide you with educational resources to help you make informed decisions.

3. Start small. You have to start somewhere, but you don’t necessarily have to start with a
$10,000 trade or with some Berkshire Hathaway stock. Warren Buffett had to start somewhere, and so do you. Take it slow and try to learn something new every day.

That’s it for your first stock trade! So you know, this video is for explanation purposes only and does not constitute a recommendation or guarantee of earnings.

Now, go forth and prosper!

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