Here is a beginners guide on how to buy stocks. This is how to buy stocks for beginners, a stock market for beginners guide! Buying your first share of a stock can be intimidating, but once you understand the basics you won’t be afraid to jump in to the world of trading and investing in the stock market for beginners!
In order to buy or sell a stock, you need a stock broker. In order to have access to a trading platform, you need a broker. You can go through an in person stock broker, an online discount stock broker or now a free stock broker thanks to Robinhood. I highly recommend Robinhood for stock market beginners looking for an easy way to buy stocks.
The trading app Robinhood offers free stock trading with no minimum account balance. Many have asked me about my opinion of another trading app many stock market beginners use called Stash. This app charges you $1 a month for an account balance under $5,000 and 0.25% per year for an account balance over $5,000. For that reason, I am partial to Robinhood. I think this is the best app for stock market beginners to use when buying their first stocks.
Once you decide on a broker you need to open a trading account. You need a trading account in order to buy and sell stocks. You typically have two options; a cash account and a margin account. A margin account allows stock market investors to purchase securities with borrowed funds. A cash account is a regular brokerage account where securities are paid in full. Stock market beginners want a cash account 99% of the time. Trading on margin is not for beginners.
In order to open the account you will need proof of identity and proof of address. Once you fund the account, you are ready to buy stocks. In order to buy a stock you will need the stock symbol. For example, the symbol for Coca Cola is KO. You would type in KO on your trading platform and click buy in order to buy stock in Coca Cola. This is a stock many beginners invest in as well.
When buying stocks, you have a few options for order types. You want to make sure you are using the correct order type when buying stocks.
1. Market: Executes a buy order at the current market price.
2. Limit: The maximum price you will pay for a stock.
(Ex. ABC Stock is $30, Buy no higher than $25)
3. Stop Loss: Executes a buy order when the set price is reached.
(Ex. ABC Stock is $25, Buy no lower than $30)
4. Stop Limit: Trigger a limit order when the set price is reached.
(Ex. ABC Stock is $25, Buy no higher than $30.10 after it hits $30)
There you have it! Those are the basics of how to buy stocks for beginners. I hope you found this stock market for beginners guide to be useful. The stock market can be a great way to invest your money and I encourage you to learn as much as you can about investing. Learning how to buy stocks and opening a trading account is the first step and you have now accomplished that!
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If anyone is looking to open a stock trading account, I highly recommend Robinhood as they offer free stock trading. I recommend them because this is the stock broker I use. Unlike traditional brokers, they do not charge commission on trades or require a minimum account balance. If you are interested in signing up, here is the link:
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DISCLAIMER: I am not a financial adviser. These videos are for educational purposes only. Investing of any kind involves risk. While it is possible to minimize risk, your investments are solely your responsibility. It is imperative that you conduct your own research. I am merely sharing my opinion with no guarantee of gains or losses on investments.
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