One way to build wealth is by investing a portion of your money. The stock market is one investment option that enables people to choose companies in which they wish to invest. Because the purchase of stocks carries some risk, beginning investors might be prudent to make initial investments on a small scale. Buy minimum or small amounts of stock to learn the process and become comfortable with the risk.
1. Determine your investment budget — the lump sum you have available for investing currently or the amount of money you wish to allocate monthly for purchasing stock.
2. Research companies to decide which stock you wish to purchase. Visit the NASDAQ website to view the company stock reports. Find companies you like and note whether specific companies’ stock prices are increasing or decreasing. Consult a full-service stockbroker for stock recommendations if you do not wish to perform this initial research yourself.
3. Choose a brokerage firm or an online brokerage firm to execute your stock purchases. A brokerage firm provides more personalized service to assist you in making investment decisions. Such assistance, however, comes with higher fees. An online brokerage firm provides the basic vehicle to enable you to make purchases over the Internet without providing personalized assistance. Less service means lower fees. Compare the terms, services and fees of various firms to find the one that provides the services and fees you desire.
4. Provide your personal information to the brokerage firm, including name, address, Social Security number and payment information. If you are opening an online brokerage account, provide all of your personal information and deposit funds to create an account.
5. Utilize the brokerage firm services to purchase the stocks you want, either over the telephone or by using the firm’s website. For an online brokerage account, log in to your account with the credentials provided to you and purchase the stocks you desire.
6. Monitor your investments monthly by reviewing statements you receive in the mail or by viewing your monthly statements online in your account. Make additional investment decisions depending on your budget and the gains or losses of your stocks.
- Various fees to consider include brokerage fees, account maintenance fees, telephone order fees, mobile trading fees and inactivity fees.
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