A friend of mine, who graduated college earlier this year, recently told me that he wanted to start investing in stocks. However, he wasn’t exactly sure how to start. I told him that there are a couple different approaches to buying stocks, and it really depends on how much hand-holding he needs or wants.
The easiest, cheapest way to buy stocks is through an online broker. An online broker basically takes your order and makes the purchase. It can be done more or less instantly, and these days there’s no human interaction involved. It’s also the cheapest, as the cost you pay is based on the number of transactions you make… usually, with no minimum. A quick search will lead you to many online brokers that you can research and use. This is how I first bought stock.
There are also some discount brokers who offer some assistance. You can often find this option also through online brokerages. However, if you’re really looking for financial advice when it comes to stocks, you’ll have to pay more for a full-service broker. It really depends on whether you want recommendations or direction from someone with this kind of experience.
No matter which route you choose, educate yourself first. There are many resources out there. You can read articles on the broker websites and use websites such as Investopedia.com. You can also use stock simulators ondifferent websites to play around risk free. Finally, you can join investing clubs. If you’re in college or grad school, it’s likely that the business school at your college or university has an investing club. It’s a great way to pick other people’s brains and learn from their experiences.
Finally, start slow. If there’s a company you want to buy stock from, invest a small amount first to see how things go. Once you feel more confident and knowledgeable, you can up the ante.