How to Invest in Stocks on the Internet

Investing in stocks on the Internet allows you to manage your finances at any time of the day and from anywhere you wish to do your buying, selling and trading. It only takes a few minutes to set up an online brokerage account. There are many sites where you can do this, such as Charles Schwab, Ameritrade and eTrade. For the purpose of this article, we will look at the eTrade site as an example. However, don't worry, the other sites have a similar process.

Difficulty: Moderate

Instructions

1. Set up your account in one of three ways. Register online on the trading website, call the customer service number (for eTrade it is 1-800-387-2331) or download an application and mail it in to the company. The snail mail option is perfect for you if you're worried about submitting personal information over the Internet.

2. Fund your account. Obviously you need money to buy your stocks. Putting it in your trading account makes the process quicker and easier, plus it is required. To add funds, mail a check or send your money by wire. Call the financial institution you use and ask if it offers wire services. (Most will charge a fee for this.) If it doesn't, there's always Western Union.

3. Look through the options available through the website and decide which stock you'd like to purchase. Etrade offers a personal financial advisory service if you're not sure what to buy, though there is an extra charge for it. If you want to decide on your own, check out financial magazines like Money or Forbes or go to websites like the Motley Fool. Most professionals recommend diversifying, putting some money in low risk investments and some in high risk ventures. A good way to do this is with a mutual fund.

4. Make your purchase. Once you know what you want, buying the stock is easy. Just select the number of shares you'd like and check out like you normally do when shopping online. Note that on top of the price of the stock you will have to pay trading fees. So check out how much they are before completing your transaction.

Tips & Warnings

• If you're really confused about what to do, seek the advice of a stock broker. It's better to spend more money having someone invest for you than to lose it all because you made uneducated choices on stock purchases.
• Unlike money you save in the bank, you don't get FDIC insurance on stock investments. If the stock goes down, you lose money, so don't invest your entire life savings.

Resources

• Check Motley Fool for investing advice
• eTrade
• Ameritrade
• Charles Schwab