How to Buy Stocks One Share at a Time

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If you want to invest in the stock market one share at a time, you could open a regular online brokerage account, fund it and buy stock in single-share quantities. But the $7 to $10 commission for a stock trade makes this a costly way to invest. As of May 2010, two online brokers, ShareBuilder and BuyAndHold, allow the regular investment of small amounts into individual stocks. You can set your investment level at about one share per purchase if you wish.

  • Open an account with ShareBuilder or BuyAndHold. Each company has a link for opening new accounts at the top of its website.

  • Select one of the automatic investment plan options after completing the account application. As of May 2010, ShareBuilder offers a single-stock plan for $4 a month or a six-stock plan for $12 a month. BuyAndHold allows you to purchase two stocks for $6.99 a month and offers unlimited investing for $14.99 a month.

  • Set up electronic funds transfer through the company's website to link your checking or savings account to the investment account. The opportunity to set up the banking link will be part of the account application process.

  • Pick the stocks you want to buy and set up an automatic investment with the frequency and amount. ShareBuilder sets up an automatic plan to purchase the shares of selected stocks each month. BuyAndHold uses a shopping cart approach in which you select the stocks and dollar amounts for your investment each month.

Tips & Warnings

  • If you want to purchase one share at a time, set your purchase amount at a level near the current share price. The plans will buy fractional shares if the amount invested is above or below the actual share price.
  • Compare the pricing plans of the two share-purchase companies based on the number of stocks you want to buy shares in each month.
  • Consider increasing your investment over time to help your stock portfolio grow faster.
  • Stock investments are subject to losses of the amount invested. Do your own research before investing in any stock.
  • These automatic investment plans does not have access to shares of every stock, although the list includes several thousand stocks. If you want to buy a particular stock, check the list before applying for an account.

References

  • Photo Credit business charts with buy image by Andrew Brown from Fotolia.com
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