How to Open an Account to Invest in Stocks

Investing in Stocks for Fun and Profit

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Whether you're thinking of building up a portfolio to supplement your wage or to make a living out of, you'll want to buy well and make money. There will be losses along the way, but that's normal when you're starting out. Learn quickly and you'll get some enjoyment out of this as well as some money. Will you be buying through an online brokerage or buying stocks yourself? How will you evaluate a stock and where will you get your information from? The following aims to answer all those questions and many more of the most common queries that come up when you begin trading stocks.

Online Brokers

Investors normally leave it to the experts and allow brokers to make the trades for them. The largest and some of the smaller brokerages offer online trading so you'll be able to manage your account from your computer. Once an account's open, tell your broker what type of share you'd like to put your money into and how much to invest. The broker takes a commission that works out at a few cents per share so you get their expertise at a low cost.

Buying Stocks Direct

You can miss out the broker and buy the stocks direct. There are a few well known firms that will sell their stocks directly to individual investors. These direct stock purchase plans sometimes have a very low commission or service charge that's less expensive than a broker's charge rate. If you're looking to purchase a small amount of stock, this could be the way to go as you'll maximize your investment, but there are normally restrictions on when a stock can be bought.

Stock Charts

In order to analyze your investments, you'll need a good stock charting service. Being able to track and understand a stock's historical performance, for example, is one of the many things that a reputable stock chart will offer investors. The sort of chart that gives key events and highlights the major days for the stock allows you to understand how the stock's value fluctuated and more importantly, why it changed, which will make the decision of keeping or ditching the stock easier to make.

Buying Shares Online

It's easy to forget that you're investing in a company and therefore a company's future. When you're looking at numbers and graphs and thinking about your own profits, you might forget that you're putting money into a company that will thrive, stagnate or die off, so learn something about the firm you're putting your money into. Does it have growth potential? Are its shares trending upwards? What value have they peaked at in the past? You'll find all this information online if you take the time to look.

OTC Stocks

Have you heard of OTC stocks, but aren't aware what those letters stand for? Some companies aren't listed on a major stock exchange so they're traded "over the counter" (OTC). Money can be made, but investors aren't as well protected as they are when they invest through a major stock exchange. That's because federal laws make sure every public company hires an independent accountant to audit its financial information. With OTC stock, that protection isn't in place so you could be putting money into a firm that is worth nothing.

How to Sell Shares

Have you decided if buying and selling stocks is right for you yet or do you need more time to think it through? The good thing with stocks is that you can sell them just as quickly as you bought them so you can invest a little of your money and then pull out if you decide against it. As with anything that involves investing your money, only put in what you can afford to lose to begin with and then build up as your stocks increase and your confidence builds.

How to Open an Account to Invest in Stocks

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