How to buy a stock?

One of the biggest questions asked in the investing world is how do I invest? And it really is quite simple, but we know it can be daunting taking that first step, so we’ve compiled a step by step plan in how to do it.

Firstly you’ll want to pick a brokerage firm that’s right for you, ideally they will take 0 commissions but more importantly is that they have great reviews. Remember your trusting them with your hard earned cash so it’s vital they have a good reputation.

Once you’ve made this leap, the rest is relatively straightforward. Go to their website or app and open an account, they will ask you to fill in your details ranging from date of birth to your address, with most additionally asking about your level of experience placing trades. When you’ve opened your account, link it to your debit or credit card and deposit the funds you feel comfortable putting in.

Next is possibly the hardest part, what to buy. Through technical and fundamental analysis you will have to work out which stocks and other investments you want to purchase. This is critical in making returns in the market as it’s thought that as many as 90% lose money in stock picking through speculation and poor choices each year, don’t be one of them.

At its core technical analysis is evaluating trends in past market data, price and volume, to predict the future price movements. Fundamental analysis seeks to find the ‘real value’ of a company through their financial statements and an overall look at the factors that will affect them. This could be their competitors, the economy, business cycle or interest rates. Once you’ve had a deep look into these companies using these disciplines, you’re ready to purchase a stock.

The final step is buying the stock. Type in the ticker symbol e.g. Amazon is AMZN, then click BUY, if you haven’t already deposited any funds it will ask you to do this now. Now you have officially bought your own stock. Congrats.

Summary

We hope that you’ve found this insightful and made the concept a little less daunting. On a final note, we understand the process can be exciting purchasing your first stock, but remember to do your research before stock picking and if you’re having trouble finding the right one there are always a range of ETFs and Mutual Funds that are at your disposal.