Introduction to buying stocks

With the recent spike of the Dow Industrial Average, are you worried that you are missing the one of the lifetime chance of stock market? But don’t know how to start? In this tutorial, I will explain the details of how to buy stocks.

Stock trading is not easy and it requires your time, money, and attention. Especially, if you are going to maintain your portfolio by yourself, you will need to study and read news daily. But stock trading is one of the investment methods with high ROI (return on investment) rate. And it pays off your hard work.

Hello, my name is Chris and I would like to share my experience. I have started stock trading about 3 years ago, but I am not an active or day trading stock trader. I will try to explain on what I learned about stock trading during the past 3 years. I am not a professional trader, so please take this information as one of the references.

Now, are you ready to buy some stocks? First step is to select which stock brokerage service to use for buying stocks.

Which brokerage service should I use?

Full-service brokers provides stock advice and alert to the customer when to buy or sell their recommended stocks. You can use Full service brokers. Commissions are typically based on a percentage of your purchase (or sale) price. They are very expensive charging $100 or more depending on which firm or which professional advisor you are using.

Discount brokers is the ones providing services at the lower price. They charge about $10 or $20 for a trade of 1,000 shares or less, or about one-third the price of full-service brokers on average.

Online brokers is services provided through Internet Website. You can buy or sell the stock by yourself. Therefore, you will need to research which stock to buy. The fee is varying from $0 to $15 a trade, this is the cheapest method of all.

Online brokerage service is good because you are in full control of the stocks portfolio. You can buy or sell any stock any time you want. You have all the latest stock price information at hand. You can compare and research company news and information pretty easily.

But the decision of which brokerage service to use should be made according to your needs. If you want to invest in stock market but want professional advice, you should look into Full-service brokers. To get a report on any broker, call the National Association of Securities Dealers at 800-289-9999. But if you want to start and have full control by yourself and you already know which stock to buy, you should go for the online brokerage service.

Personally I like to have full control so I like the online brokerage service. I will concentrate on how to buy stocks using online brokerage service. The terms and concepts of stock trading are basically the same, so I believe my article will help you even if you do not plan to use online services.

Practice Account

Before actually signing up for the real account, I highly recommend you to practice with virtual stock trading account. There are lots of free virtual stock trade practicing online services out there, but you can try updown.com for example. It’s fairly easy to start investing and get a feel of how the trading works. They initially give you virtual money of 1 million dollars. Also, if you score better than the S&P 500, you will earn some real money every month. (Winner will receive $500.)

Create the free account, research and buy some stocks, practice until you are comfortable and have confidence with your decision. Then you are ready for some real trading.

Next : Signing up for online brokers