Buying Stocks Online

If you're interested in buying stocks online but have no idea how, then this article will provide you with sufficient information to start your journey with stocks online. I'll bring you through the basics of how to create an account, finding a suitable broker and finally executing market orders. If you've no idea what I'm saying right now, don't worry because I'll explain all these shortly.

Setting up your account

Before you begin investing, set aside a suitable amount of money dedicated to this purpose. Personally, I would recommend at least US$10,000. While you could probably start with less, you wouldn't be able to see much gains as they would mostly be eroded by the transaction fees etc. Since these fees tend to be fixed amounts, the larger your investment, the smaller the fees are as a proportion of your purchase. This makes it less significant, hence allowing you to preserve more of your gains. 

It is important that you separate this amount from your savings account, and create a separate investment account. By isolating this money, you can easily tell the amount of gains or losses you make over a given time period, without being affected by withdrawals or deposits into your savings account. Having created a separate account to buy stocks, you'll need to find a suitable brokerage firm.

Finding your broker

One of the perks of investing in stocks online is that broker fees tend to be lower. I'm going to be objective here and not try to sway your opinion, but I want you to do your own research on different firms and choose one that is trustworthy. Just keep in mind that you get what you pay for, so don't skimp on necessary fees. Go for an online firm that is well known and reputable instead of just finding the cheapest one. You won't regret it. After applying with your broker, you can connect your newly registered bank account to your brokerage account. After which, periodically transfer a certain amount into your brokerage account. 

Making a Buy Order
Once inside the system, you can start making buy orders using your account. Review the stocks carefully and make your choices wisely. There's a ton of information out there about stock choices and I can't possibly cover everything here. Go read up about this and you can even sign up with sites like MorningStar.com which provide comprehensive information on stocks. 

Having explained the basics behind buying stocks online, you are now equipped with the information to make your first step to investing online. That said, this article is just the tip of the iceberg, and while you can start testing the waters at this point, I highly recommend you take steps to educate yourself on investing. I highly recommend that you log off the internet and start picking up some investment books to read, which will prevent you from losing your hard earned savings, but instead give you an advantage over others in the financial race. If you've no idea what to start with, try the reading list found on EfficientFrontier.com. (I'm not affiliated in any way with the sites I have recommended, but having benefited greatly from the information provided by these sites, I feel compelled to refer you to these sites for your benefit as well as the authors, should you decide to make any purchases.)