Are you ready to start investing in the stock market? Do you not know where you can start purchasing stock? Join the club, literally. You can make buying stocks as painless or painful as possible – but be careful. The stock market is the “gold standard” for many passionate investors where they try to strike that gold. You’ll need to do extensive research on stocks and follow the news or trends for the companies you chose to invest in. Don’t let this scare you, it’s actually really easy to buy stocks.
How to Setup a Brokerage Account
This is step one in the process to buying stock for the first time. You’ll have to apply for a brokerage account with a broker like: Ally, TD Ameritrade, Charles Schwab, or Fidelity. There are obviously more brokers out there but those are a select few. You’ll need to weigh the pros and cons of each as there is no such thing as a “one size fits all” broker. The basic accounts you’ll find are a full service and some sort of discounted account for starter investors.
We suggest as a beginner to find a starter investment brokerage that has smaller deposit requirements allowing you the flexibility to make adjustments or changes on the fly and not have thousands tied up in transactions. We also suggest that you set goals, otherwise you’ll just buy stock and not really know what you’re doing.
What Stock to Buy
There are some good industries that are “stable” like telecom, pharma, and so on – but seek guidance if you’re unsure. No one can truly tell you which stock is the best for you or which one you should buy. This is entirely your decision and it should be based on research. There are tons of stocks you can choose from and narrowing down your options can be pretty tedious. Teen Finance Tips suggests finding a industry, company, or niche that you’re really passionate about and find stocks with or in those. You’ll be more likely to stick to the research and do your due diligence before you buy.
You should always follow the news of the company and review the history of the stock prior to purchasing. If a company is currently getting a bunch of backlash and their stock price plummeted it may be wise to follow that for a little bit to see how it plays out – it may be a good stock to jump on and “ride it out” to see gains several months later. Keep in mind, the stock market is not entirely meant to be a way to get quick cash, it’s a long term game in most cases.
Place a Market Order
A market order will ensure that you get the shares you’ve requested at or above your asking price. Basically you’ll get your shares at whatever the price is at that current time. If you don’t care too much about price then fire up a market order and get those shares in your portfolio to start building volume. We only suggest to do this if you’re in for the long haul and looking to play the long game with your stocks.
Place a Limit Order
A limit order will ensure that the broker will only purchase shares if they meet or are below your asking price. This keeps you inside your allotted budget for those shares. See, learning how to budget comes into play big time here too. The problem with a limit order is that it’s second to a market order, so if the broker has market orders for the same stock they’ll fill those first. Many people leave limit orders on the table for a long period of time just to secure the stock at that price, we don’t suggest this if you’re trying to buy stock and flip it quick.
Place a Stop Order
A stop order is ran by the price of the stock and is only filled with the number of shares reach the stop price. This means you may not always get the amount of shares you deserve, it’s kind of a “get as many as you can” type scenario but it’s another way to make sure you don’t blow your budget for investing.