How to Buy Shares on the Stock Exchange
Your first investment might feel intimidating. You may delay setting up an account with a brokerage because you don't know which stock to choose. This can hurt your retirement fund in the long run. Here is how to buy shares on the stock exchange so you can diversify your portfolio.
Other People Are Reading
Instructions
-
How to Buy Shares on the Stock Exchange
-
1
Choose a broker. If you go with an online broker, you likely will have to make your own stocks selections. You will have to pay a flat fee per trade. A traditional broker will give you advice. He charges a percentage of the money you are investing. The choice depends on how confident you are in making your own decisions.
-
2
Set up an online account. If you go with a traditional broker, check for a firm that has an online capacity. This gives you the power to make your own decisions, even if it's early in the morning. If you go with a bigger brokerage they'll usually have online account access, so you can buy or sell shares on the stock exchange in seconds.
-
-
3
Find the stock symbol. This is the letter symbol that you will need to buy shares on the stock exchange. Your online broker site should have a place where you can look up the symbol by company name. Always double check the symbol. You don't want to invest in the wrong company by mistake.
-
4
Transfer money to your brokerage. To buy shares on the stock exchange, you will need to have money in your brokerage account. You can set up a relationship between your bank and your online broker. In order to do this, you'll need your bank account number. You'll also need your bank's routing number. This is the first set of numbers that appears on the bottom of your check before the bank account number. Then just wait for your broker to make several small deposits in your account. Go to your brokerage account and verify these amounts. It might take a few days for you to have access to your account's funds, so don't be overly anxious. Then you'll easily be able to deposit and withdraw money from your stock account.
-
5
Do your own research. This is the trickiest part of how to buy shares on the stock exchange. It's difficult to choose among the hundreds of different formulas and theories. When you tell people that you are going to invest in the stock market for the first time, they likely will have several stock tips for you. You may watch TV programs that are solely dedicated to which stocks to buy. You might not know which advice to trust. Check each company's financial records instead of trusting word of mouth. The numbers don't lie.
-
6
Learn about limit orders. When you place a basic order, it's called a market order. Since the stock market fluctuates quickly so a limit order can help you get the price you want. If a stock rises to above what you want to pay per share, the transaction is stopped. You run the risk that your order won't be placed if the stock soars high above your price range.
-
1
Tips & Warnings
Even if you know how to buy shares on the stock market, there is no such thing as a sure thing. Never invest more money than you can afford to lose.
Resources
- Photo Credit epicharmus
