Buying stocks is really not as complicated as it seems, but you’ll need to do some groundwork — and learn the key terminologies — before you make your first investment. It’s important that you choose your stocks carefully. Over time, stocks are one of the best ways to build wealth because they pay dividends, which are paid to shareholders based on their ownership of a company and its profits while also growing in value. Here’s a quick look at what you need to do to get started.
Select a Stockbroker
To buy stocks, you’ll need to open an account with an online stockbroker. Once you fund your investment account, you can proceed to purchase stocks in a matter of minutes through the broker’s website. Other options include purchasing stocks directly from a company or using a full-service broker.
Research Stocks
Once you’ve funded your brokerage account, you can dive into the process of picking stocks. A good way to start this process is by purchasing the stocks of companies you know. Don’t let real-time market volatility overwhelm you when you are doing your research. The objective of this step is simple: You want to find companies that you would like to become a part-owner of. Once you’ve identified these organizations, you need to review their financials so you are able to make an informed decision.
Decide how Many Shares You Would Like to Buy
You should not feel any pressure to purchase a certain number of shares or fill up your investment portfolio immediately. If you’re new to the world of stocks, consider starting really small — you may even want to purchase just a single share to get a feel of what it’s like. You can add to your investments over time as you gain mastery over the process.
Optimize Your Portfolio
Stocks often go through rough patches, and, unfortunately, market volatility is not something you can control. However, by diversifying your investments across different sectors and assets, you can ensure that the value of your portfolio is protected.