How to Buy Stocks: Easy Steps to Get You Started

Investing in stocks for the first time is a daunting task. It can be scary because real money is at risk of loss.

Some investors buy stocks to create a growing passive income stream, or a dividend growth strategy. The idea is simple and works, and many real-life stories exist of people building wealth from equities.

The question then is how to buy stocks for beginners? What steps are essential to know?

Basics of Stocks

A beginner must first understand the basics of stocks. A stock is also known as a share and represents the percentage ownership of a company.

Stocks are not risk-free. Most people are familiar with low-risk savings accounts and Certificates of Deposit that are, in many cases, insured by the Federal Deposit Insurance Corporation.

Risks for Stocks

1. Pick a Brokerage Firm 2. Research a Stock 3. Amount to Invest 4. Select An Order Type

Steps on How to Buy Stocks for Beginners

Start buying stocks by picking a brokerage firm. In the past, an investor had to deal with a broker who placed a buy or sell order. Today, orders are placed directly by the investor online.

1. Pick a Brokerage Firm

2. Research a Stock

Start researching a stock by reading about it in one of the many investing books available to the public regarding learning how to research and select stocks.

The next step is to decide on an amount to invest. If you have a lump sum, it makes sense (and reduces risk) by not investing it all in one trade.

3. Amount to Invest

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