How To Invest In Individual Stocks

If you are looking to learn how to invest in individual stocks, you have come to the right place.

How To Invest In Individual Stocks

Almost anybody can buy individual stocks, all you need is some money and a stock broker.  The key to successfully learning how to invest in individual stocks is to take the time to research potential brokers, develop a plan for investing and thoroughly investigate each potential investment prior to committing any capital.

You can start trading with a small amount of money even less than $100, but if you have too little the broker commissions are likely to eat into your profits too much.  It is wise to shop around for brokers with the lowest fees and the most resources, especially in the case of having a small amount of funds to invest.

How To Invest In Individual Stocks: Finding A Broker

The first step you need to do to buy individual stocks is find a good online broker. Broker commissions can vary widely. Unfortunately some brokers are very greedy and are more interested in lining their own pockets than giving you a good deal on your money.

A discount stock broker is suitable for most traders. These types of online brokerages just offer a trading platform and leave the rest to you. The big upside to discount brokers is they tend to be a lot cheaper. For more information on discount brokers, check out my discount stock brokers page.

Once you have decided on the right stock broker for your needs, the next thing to do is open an account and fund it. Many brokers make it very easy to open an account, it shouldn’t take longer than ten minutes or so.  There are many brokerages that offer automatic deposits into your trading account, and for many people, is is a good idea to utilize this feature, as it simplifies the saving process and ensures that you stay on the right track.

Funding Your Account

Once your account is funded, you are then free to invest in individual stocks, ETFs, bonds and much more.

If you don’t have much experience trading the stock market, it might be advisable to initially trade a virtual stock trading account. This is an account that trades just like a regular account, except you are trading with pretend money. Your account balance with fluctuate just like a real account, so it will give you a good idea of what trading a live account is like, just without the risk.

I’m sure your goal when buying individual stocks is to earn a return, or a profit. To do this it is very important that you buy stocks at a good price. One other important factor to consider is the historic annual returns on individual stocks.

Research Potential Investments

It is always advised to research each and every potential investment, no matter how “safe” it may seem to be.  Many brokers and web sites offer stock screeners, where you can search for potential investments based on preset criteria.

You will also want to familiarize yourself with the fundamentals of the companies you are considering investing in to make sure they fit into your investment objective.

The goal for most traders is to buy low and sell high. If you need help decided on a trading system, feel free to check out my stock trading strategies page.