How To Buy Stocks and Shares Online
Buy Stocks and Shares Online explained by professional stock trading experts, In this article you will know How to Buy Stocks and Shares Online and how to open stock trading account with the best stock brokers in the world.
How to Buy Stocks and Shares Online?
There are two main motivations for you to ask the question: how to buy and sell shares online. The first is profit and the second is experience.
Both can provide fun if you select the right stocks.
If the share you bought pays dividends or its price increases, you can make a profit. If you do this in the long run, these profits can add up and make you even a millionaire, like it happened with Mr. Gremel. The 98-year-old Mr. Gremel bought 20 Walgreens shares for $1000 in 1953. This investment today is worth $2 million.
On the experience side, you will improving your financial literacy is one of the best long term investments. Did your friends or neighbours talk about investments and the stock market, and you had no clue about the topic? Once you start investing and learning about it, this will not happen again. You will understand better how the stock market works and how it influences the economy and your everyday life.
Last but not least, as a shareholder you will be part of a company’s story. Want to know how to buy company shares? Have you ever wanted to participate in a Berkshire Hathaway annual meeting? If you buy some Berkshire shares, you will have the opportunity, just have to master the buying of shares.
Let’s take a look at the six steps to buy stocks online.
The six step plan to buy shares online
As I said before, buying shares online is not rocket science. You just have to follow a six-step plan explained below.
Step 1: find a good online broker
First of all, you need to find a good online broker. Brokerchooser will help you here: get a free recommendation by answering a few questions, or check our general stock broker recommendation.
When recommending a broker we take into account the broker’s trading platform, the cost of service, the quality of customer service and accessible markets to trade. Security is also highly important, but since we review only secure brokers on our website, you do not have to worry here.
Step 2: open your investment account
After finding your online broker, you need to open your investment account. This is usually an online process, quite similar to opening a bank account. The investment account is basically what you need to start buying shares online. Imagine again as a bank account, but apart from holding cash on it, you can also hold shares. The account opening process usually takes a couple of days, but at some brokers (for example eToro), you can do it within one day.
Step 3: upload money to your account
For buying shares online, you need to have money in your investment account. Usually you can choose between bank transfer and funding via credit/debit card. At some brokers you can fund your investment account even from Paypal (for example at IG).
Step 4: find the stock you want to buy
After loading some money into your account, you can start searching for the best stock targets to buy. You can get inspired by external ideas or you can even do your own analysis. Most of the people do the former, but the latter usually pays out better and you can learn more from it. External investment ideas can come from your broker in the form of research or you can use other, independent researches as well. The financial news and investment courses can also be useful to learn how to buy a share that is good.
Step 5: buy the share
You have the account, the cash and the share target. The last step is to push the buy button. You log in to your online trading platform, search for the share in mind, insert the number of you wish to buy, and click buy, which will initiate the purchase of shares.
When placing an order, you can choose from different order types. The market order buys at the actual market price, while the limit order allows you to specify the exact price at which you want to buy the share.
Step 6: review your share positions regularly
You are done, your shares are bought. However, it is key to monitor your investment. This basically means following your investment strategy. If you bought the share for holding it for a longer term, you might participate at the annual meeting and collect all the news and information about the company.
For short time buyers, the position management could mean only setting up the stop-loss price of where to cut the losses and the target price of where you want to sell the share with a profit.
Now that you have mastered the 6 steps of buying shares, take a moment to look at the top 10 stock brokers we have selected for you.