How to invest in the stock market

You've learned the basics about the stock market, but how do you open an account and starting buying stocks? The popularity boom of the internet has made investing in stocks online very easy. You can purchase stocks through a brokerage company or directly from the company who is offering the stock you would like to purchase.

Purchase stocks through a brokerage company

Purchasing stocks through a brokerage company is the most common way to buy stocks. So let's go through an example of opening an brokerage account with ABC Brokerage Company, then buying 250 shares of your favorite stock. For your convience we have a list of some of some of the brokerage companies that are available in our Stock market information page.

Opening a stock brokerage account

The first step is applying for an account and sending ABC Brokerage Company a check for how much you would like to open the account with. After receiving your approving your application ABC Brokerage would then open your account and deposit your check in your account. You can now logon to your account and see when your funds are available for you to start investing in the stock market.

Start investing in the stock market by purchasing your first stock

Once you are able to start investing you put an order in to buy 250 shares at the current price of your favorite stock, which is currently trading at $15.00 per share. ABC Brokerage would then send an order to buy 250 shares of your favorite stock at the current market price to the appropriate exchange that has that stock listed. Every stock is listed under some exchange or some like overseeing entity. The exchange then electronically matches your order to buy 250 shares of your favorite stock with someone who is willing to sell 250 shares of your favorite stock at the current market price. There are other behind the scenes processing steps that are invisible to the end users so we won't even mention them here. Once the match is done your account will send you some kind of confirmation that you bought 250 shares of your favorite stock at $15.00 per share. There you have officially started stock market investing.

Buy directly from the company

Dividend reinvestment plans or DRIPs is a way to invest in individual companies for a lower cost than through a traditional brokerage company. They allow investors to buy stock directly from the company. This is a nice way to invest if you have a small amount to invest and you would like to put additional money towards that stock at consistent intervals of time ($100 per month).

Back

Keywords:

Stock Market, Investing in stock market, How to invest in the stock market, Stock Analysis, Fundamental Analysis of Stocks, How To Do A Stock Analysis, Stock market, Stock markets, Stocks, Stocks Analysis