By: Matt @ Home & Pocket
January 24, 2025
Congratulations! After years of watching the stock market from the sidelines, YOU have finally decided to dive-in and start investing.
I’m sure the idea of buying stocks has always felt a bit intimidating, with its ups and downs, but over time you have probably realized that the only way to understand it is to jump in yourself truly. With some research under your belt and a clearer picture of your future financial goals, it feels like the right moment to take the plunge and start building something for the future.
It’s a little nerve-wracking, but exciting at the same time. Does that sound like you? Or someone you know getting started in the Stock Investing World?
Well if so, you’re in luck! I’m going to layout how you begin to invest in the Stock Market and get you started on your way to achieve financial independence.
1. Choose a Brokerage Account
When choosing a brokerage account for buying individual stocks, it’s important to find a platform that aligns with your investing goals, budget, and experience level. Not all brokerage accounts are created equal and some are designed for different levels of investing.
Look for a broker that offers low or no commissions on stock trades, as well as a user-friendly interface, especially if you’re new to investing. Most brokerage accounts today should be “No Commission.” You’ll also want access to research tools, educational resources, and a variety of order types to help manage your investments effectively.
Major brokerage accounts like Charles Schwab, Fidelity, TD Ameritrade, Robinhood, and E*TRADE each have their own strengths. Charles Schwab and Fidelity are often favored for their comprehensive research tools, excellent customer service, and retirement account options. They charge $0 commissions for stock trades, but there may be fees for certain account types or transactions.
TD Ameritrade is known for its powerful thinkorswim platform, ideal for active traders who need advanced charting and analysis. On the flip side, Robinhood is popular for its simplicity and $0 commissions on trades, but it’s been criticized for lacking robust research tools.
If you’re just starting out and prefer a straightforward approach, Robinhood might be a good fit, while more experienced investors might lean towards Schwab or Fidelity for more advanced features and resources. Ultimately, the best brokerage account depends on your personal investing style and needs. I recommend talking to friends and family to see what they use and like. And don’t fret, you can always change platforms later or have multiple accounts.
2. Open and Fund Your Account
Once you choose a brokerage, you need to open an account by providing personal information (like your Social Security number, address, and employment details). After that, you’ll need to deposit funds into the account to buy stocks. You can fund your account via bank transfer, wire transfer, or other methods depending on the platform. Some of the brokerage accounts we listed above have a minimum amount to begin investing and some don’t. It’s important to check each one to ensure you can begin investing immediately.
3. Research Stocks
Congratulations! You now have a brokerage account and are ready to buy your first stock. Before buying any stocks, it’s essential to research the companies you’re interested in. Also, be sure to have an investment plan in place or you will just buy stocks without any knowledge or goal.
What I mean is, are you looking to invest in only dividend stocks, growth stocks, mutual funds, ETFs, etc. Look into factors like their financial health, market trends, and any other key indicators that can help you make informed decisions. You can use tools provided by your brokerage or financial news websites for this.
I speak in depth on this in “How to Build a 10-Stock Dividend Portfolio: A Step-by-Step Approach”
There is no right or wrong answer; the important thing is that you have a plan and you stick to it. Warren Buffett Said it best:
4. Decide How Many Shares to Buy and place your Order
Based on your research and how much you want to invest, decide how many shares of a particular stock you want to buy. Keep in mind the price per share, as well as any fees associated with the trade. I teach and always start with a single share of any new stock I’m initiating a new position.
Once you’re ready to purchase, go to your brokerage platform, search for the stock by its ticker symbol, and place an order. There are two main types of orders:
“Time in the Market Trumps Market Timing”
– Warren Buffett
- Market Order: This means you buy the stock at the current market price. Keep in mind that most brokerage accounts show a price that is 15 minutes delayed.
- Limit Order: This allows you to set a price at which you want to buy the stock. The order will only be executed if the stock price hits that price or lower. This is what I recommend doing. Keep in mind that if a stock is overly active that day – meaning moving UP or DOWN faster than usual due to news it may be hard to target a specific price.
Before finalizing the order, review the details carefully. Ensure you’re buying the correct stock, and the correct amount of shares, and that your order type is correct. Once you’re sure, confirm your purchase. I can’t tell you how many times I was in a rush to buy a stock or more shares and I didn’t review the details and made a costly mistake.
5. Monitor Your Investment and Stay Active
After purchasing, it’s important to track the performance of your stocks and stay informed about market conditions. This can help you make adjustments to your portfolio as needed. Remember to keep you mind on Diversity within your portfolio. Spread your investments across different stocks or sectors to reduce risk. And like any investment Stocks are and should be considered a Long-Term investment. Investing in stocks typically works best if you’re patient and take a long-term approach
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