Every newbie in the investing field thinks that buying stock is complicated. But the truth is that buying stocks isn’t as complicated as it seems for anyone is starting their journey with investing. But we warned that you will have to do some research work and some learning work before you start investing.
There are some easy steps you can follow which will make the whole process easier and quicker for you if you just follow them. Couple of these steps I’ll tell you wont take longer than 15 minutes or so.
All steps and everything you have to do may seem confusing at first but when you use a little time you will see that buying stocks is really pretty straightforward.
Step 1) Choose an online stockbroker and open an account there.
Online stockbroker isn’t the only way to buy stocks through but it is for sure the easiest way.
There a lots of good online stockbroker firms but there are even more very bad once. So it is important to do the research and find one that will suit you best. I personally would recommend Robinhood and eToro, but of course there are also many others good once.
There are some online brokers which will provide you with tutorials on how to use their tools and even basic seminars on how to pick stocks. So if you are interested in this maybe look for it when you research online stockbrokers
After you have chosen one, you gotta create and open your account and set money onto that account. By using that account you have created or you are about to create you can buy stocks through that website in a matter of minutes or even faster than that.
Of course you don’t need to open an online stockbroker, you can also use full-service stockbroker or buy stocks directly from the company. As you may see opening an online brokerage is easier because you can open an account in 10 – 15 minutes and trade whenever and wherever you want.
All it takes to open an online brokerage account is to : complete the account application, provide proof of identification and then choose whether you want to fund the account by mailing a check or transferring funds electronically.
Step 2) Research the stocks you want to buy
After you have set up your brokerage account and put funds onto it, then the time comes to jump into stock market and start to look for good companies to buy stocks from.
Probably the best place for you to start would be researching companies you already know from your experiences as someone who have bought their services or products at some point in your life.
If you go straight to Yahoo Finances or any other website which shows the bare market you will probably get very overwhelmed if you are a newbie.
Keep investing simple whenever you can. So look for companies of which you want to become a part owner. Don’t buy Tesla stocks if you don’t like electrical cars or don’t buy Apple stock if you are a Samsung fan etc. This leads us to the famous Warren Buffett statement which is “Buy into a company because you want to own it, not because you want the stock to go up.”
The moment you identified these companies then do a little research. The best place to start your little so called investigation is with the company’s annual report. This report will give you a general narrative of the future of the business and whats happenings with it behind the scenes. It will also provide you with the context for the numbers in the report.
When you have done that it wont harm if you dig a little bit deeper and use the analytical tools which the broker’s website gives you access to. Tools you can use are conference call transcripts, SEC filings and quarterly earnings updates. Looking at recent stock market news will also help with your investigation.
Step 3) Decide how many shares to buy
If it is your first time investing then you should know that there is no pressure on buying stocks and you should also know that being hyped stocks isn’t the best idea because the hype will go down very soon and you will most likely lose cash.
Start small with just few shares and as you grow as an investor by learning more and more about it you can make your portfolio bigger and bigger. As you learn, you can add more and more positions over time so don’t feel the pressure of being a lots of shares the second you open your brokerage account.
By buying just few shares at the beginning you will get a feel for whats it’s like to own individual stock and whether you want to go all in into it or just invest couple of bucks here and there.
Step 4) Optimise your stock portfolio
The last step here is optimising your portfolio. Investing is a lifelong journey if you truly want to succeed. There will be times where things will turn difficult and in these moments it’s important to remember that every single investor goes through rough patches no matter if that investor is Warren Buffet or you.
Always keep in mind that investing is long-term and concentrate on the things that you can control.
After you have bought some more stocks here and there of various companies, take the time to go deeper into the investment world. Maybe look into funds, bonds, industries you don’t know a lots about, retirement accounts etc.