How to Invest in Stocks Online

The Internet is making investing in stocks easier than ever before. Small investors now have access to stock trading from the comfort of their own home. Competition in the online stock investing industry has brought costs down and increased accessibility to the latest information. Just follow these few tips and you will be investing like a pro in a few minutes.

Instructions

Difficulty: Moderately Easy

Things You’ll Need:

• Computer with Internet connection
• Money to invest

1. Decide what kind of online broker you want. Is personal attention from a human important to you or are lower fees a higher priority? Do you want someone to tell you the best ways to invest or are you the hands on type who makes all the decisions? Decide whether you are an independent investor or want a lot of guidance.
2. Choose an online broker like E*Trade or TDAmeritrade if you are an independent investor. Those companies provide plenty of data on stocks. It is up to you to read it and decide how to invest your money. Fees tend to be low since just about everything is automated. Don't expect to deal with real people very often.
3. Choose a full-service broker if you need more guidance. Transactions can still be handled online but you can pick up the phone and call a human being who knows you. Fees will be higher but you will get more advice, guidance and personal attention.
4. Check out online broker ratings. Web sites like Bargaineering, TheNetFool and Smartmoney evaluate online brokers by features, fees and customer satisfaction. They will help you find an online broker that is a good fit with you.
5. Open an account with the broker of your choice. This can be done online or over the phone. Once your account has funds in it you can start trading.
6. Pick which types of stocks you want. Consider your time horizon, risk tolerance and quality of investment. Online brokers can sell you everything from IPOs to blue chip stocks to mutual funds. You can day trade or leave your IRA with them for decades. It is entirely up to you.

Tips & Warnings

• Consider fees, services and reputation carefully before picking an online broker. Different brokers appeal to different types of investors. Do your homework so you wont end up with a broker who doesn't suit your needs.
• All investments involve risk. The greater the risk the greater the opportunity for reward but also the more likely you will lose money. Consider all risks, fees and consequences before investing any money. Be sure to read up on a stock before risking your money. New investors are prime targets for scam artists. Be wary of anyone who approaches you to invest.