How to Buy Stocks Through a Discount or Full-Service Broker
Investors can buy stocks from one of two sources: discount or full-service brokers. Discount brokers are online trading institutions such as TDAmeritrade, E*TRADE, and TradeKing. Full-service brokers are institutions such as UBS and Merrill Lynch. Full-service brokers often provide personalized one-on-one service but charge much higher commissions for their trades. Individuals who like to manager their own money can save a bundle in fees by doing their own research and trading with a low-cost online broker.
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Instructions
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Decide if you want to pay for advice. If you like to have professional advice and don't mind paying a premium for it, go with a full-service broker.
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Consider how much you have to invest. Many full-service brokers will only work with clients that have $100,000 or more to invest. High-profile brokers have even larger investment commitment levels; some won't even take on clients who don't have at least a million dollars to invest.
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Open and fund your account. Regardless of which approach you take, there will be some paperwork required to establish your account, and you'll need to write a check to transfer funds into your new brokerage account.
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Pick your stocks. If you are investing on your own you should consider consulting investment resources such as Investor's Business Daily or Morningstar for stock picks. If you really want to do your own analysis, you can even access raw data from sources like Yahoo! Finance or Google Finance. If you're working with a broker, he will likely present you with his investment philosophy or a basket of hand-picked stocks he'll suggest.
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Set some rules. Again, regardless of if you choose to work with a discount or full-service broker, you'll want to establish some buy and sell rules for your account. These rules will govern your brokers or your own trading and will help you decide when to buy, sell or hold stocks.
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Take your profits. When your sell point has been reached, don't be greedy by trying to let your trade ride on longer---sell your shares and book your profits.
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Tips & Warnings
Investing on your own can be risky---consider using investment research from a reputable provider such as Morningstar.com.
