3 Super Simple Steps to Start Investing in Stocks

Investing in Stocks

Want to start investing in stocks (or buying stocks)? Now is a good time, while the stock market is low. People get scared when stocks start to drop, but that’s when I get excited. Buy low, sell high.

I’ll show you in 3 easy steps how to start investing in stocks. I wish I would have known more about investing in stocks when I was younger. I thought it was a lot more difficult than it really is, so let’s get started!

First off, let’s assume you have extra money to invest in the stock market. I’m not advising anyone to finance their homes or get a loan to invest in the stock market. I don’t need anyone thinking they should do crazy things to get lots of money to invest in the stock market. This should be extra money that you won’t need right away. Alright, enough said.

Stock Investing Step #1

Set up a stock account, also called a brokerage account. Very simple to do online and there’s lots of options to choose from. My choice is Ally Invest, but there’s other options such as, Vanguard.com (which I actually use for my ROTH IRA), Fidelity.com, ETrade.com.

Items to look for when deciding on a brokerage account:

  1. Look for any minimum dollar requirement to open the account. Make sure you’re comfortable with the amount, if there is one.
  2. Look for the fee they charge to purchase a stock. This is called an equity trade fee and online brokerage companies always charge this. When I checked last,Ally Invest was one of the lowest (they charge $4.95 per trade). 
  3. Do they have an app? If you, like me, work during the day (during trading hours), it’s nice to have an app on my phone to do my trading, or stock buying, while I’m on break. Maybe you won’t need this, but it’s something to keep in mind.
  4. Do they offer free investing advice? It’s nice to have someone to talk to you if you have any questions when trading stocks.

Stock Investing Step #2

Alright, you’ve picked your online brokerage account. Just go to their website and select ‘Open Individual Brokerage Account’ (unless you want to share with your spouse, then there’s usually an option for a joint account).

They will ask you to provide your bank account information (that you’ll be transferring the money from), so have that ready, along with your social security number (they will have to report to the IRS if you have any dividends, gains, etc) and employer information.

Enter all the info required to get your account set up. Make sure to link your bank account and get your money transferred over, so when you’re ready to buy, you’ll have the money ready to go. You never know when stocks might drop and you want to buy quickly.

Stock Investing Step #3

Once you have your brokerage account all set up and you’ve transferred over how much you’d like to invest in the stock market from your linked bank account, it’s time to choose your stock to buy. In Ally Invest, you can click on ‘Quick Trade’ to make it really easy.

It then gives you the option to either ‘buy’ or ‘sell.’ So you’ll select ‘buy’ to buy a stock.

It then asks you for the ‘symbol.’ The symbol is the letters the company goes by in the stock market. When a company becomes publicly traded, they are assigned certain letters that they will be known by in the stock market. If you don’t know the symbol, you can do an online search with the company’s name followed by the word ‘ticker.’ The symbol is also called the ticker, or ticker symbol. For example, Netflix’s ticker is NFLX, or Amazon is AMZN.

Then it will ask you how many shares you’d like. This is just the number of stocks you’d like to purchase. They should have a calculator right on the page for you, so you won’t have to do math in your head to see how many stocks you can buy.

Next, you’ll be asked if you’d like to do one of 3 orders: market, limit, or stop-loss.

Market order means you can buy the security (stock) at the current market price. Keep in mind, stock market hours are 9:30 AM to 4:00 PM ET, so if you are buying while the market is open, you can see the current market price (which they will show you in your brokerage account when you enter the symbol) and your order will be placed within seconds. You can choose this option while the market is open and you want to purchase immediately.

Limit order will allow you to choose the maximum you are willing to pay for a stock when you are purchasing (or the minimum amount you’re willing to receive when you’re selling). I use this option to be safe. This way, I know, exactly, the amount I’m paying for the security. If the market isn’t about to close, I’ll usually specify a little less than the current market price (this completely depends on you; the stock may not drop at all and then you can miss out on buying). When selecting this option, you can specify if you’d like your offer to expire at the end of the day or later. I usually choose the end of the day because you never know what can happen on the next trading day, like August 24, 2015, when everything dropped drastically.

The last option, stop-loss, is for a little more advanced investing, so don’t bother choosing that when you’re just getting started on buying stocks.

Once you’ve filled out the required fields, hit the button to place your order! That’s it, you’ve completed your first stock purchase!

Check out my other blog post about my strategy on how I pick which stocks to invest in.

Have any other tips about getting started on investing in stocks? I’d love to hear in the comments below.

Don’t forget to sign up for my free course: Beginner’s Guide to Financial Freedom.



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