Français: investir en actions boursières, Italiano: Investire in Borsa, Español: invertir en acciones, Português: Investir em Ações, Русский: инвестировать в акции, Deutsch: Geld in Aktien anlegen, 中文: 投资股票, Bahasa Indonesia: Investasi di Saham, Čeština: Jak investovat do akcií, Tiếng Việt: Đầu tư vào Cổ phiếu, 日本語: 株式投資の, العربية: الاستثمار في سوق الأسهم (البورصة), हिन्दी: शेयर बाज़ार (stock market) में निवेश करें, 한국어: 주식 투자하는 방법
An online brokerage account likely offers your quickest and least expensive path to buying stocks, funds and a variety of other investments. With a broker, you can open an individual retirement account, also known as an IRA — here are our top picks for IRA accounts — or you can open a taxable brokerage account if you’re already saving adequately for retirement elsewhere.
So you have a $1,000 set aside, and you're ready to enter the world of stock investing. But before you jump head first into the world of stocks and bonds, there are a few things you need to consider. One of the biggest considerations for investors with a minimal amount of funds is not only what to invest in but also how to go about investing. Not long into your investment journey you may find yourself bombarded with minimum deposit restrictions, commissions and the need for diversification, among a myriad of other considerations. In this article, we'll walk you through getting started as an investor and show you how to maximize your returns by minimizing your costs.
Any company you invest in needs to have a moat. That is, they need to have something that prevents their competition from coming in and stealing away the control they have over their market. For example, Coca-Cola is a company with a great moat. Anyone can make soft drinks, but Coca-Cola has entrenched itself in the market. No new soft drink company is going to be stealing away their customers anytime soon.
Ask yourself some basic questions: What will the market be for this stock in the future? Will it look bleaker or better? What competitors does this company have, and what are their prospects? How will this company be able to earn money in the future? These should help you come to a better understanding of whether a company's stock is under- or over-valued.
Commissions for equity and options trades are $6.95 with a $0.75 fee per options contract. To qualify for $4.95 commissions for equity and options trades and a $0.50 fee per options contract, you must execute at least 30 equity or options trades per quarter. To continue receiving $4.95 equity and options trades and a $0.50 fee per options contract, you must execute at least 30 equity or options trades by the end of the following quarter. Regulatory and exchange fees may apply.
There are three caveats, however. The first is that you will have to meet the minimum account balance required to open a brokerage account. The second is that the selection of commission-free ETFs is limited and, from a performance and strategy standpoint, you may be better off paying commissions to get the ETF you want. Three, both ETF and mutual fund capital gains and distributions can be subject to taxes, which hurts your realized returns. (You will not incur taxes on capital gains or dividends from for funds and stocks held in a tax-deferred account, such as an IRA. Taxes are due when a distribution is made from a traditional IRA account.)
You'll have to do your homework to find the minimum deposit requirements and then compare the commissions to other brokers. Chances are, you won't be able to cost-effectively buy individual stocks and still be diversified with a small amount of money. You will also need to make a choice on which broker you would like to open an account with. To make sense of all the different platforms, browse the different online broker and roboadvisor options in Investopedia's broker center.
Some companies offer direct stock purchase plans (DSPPs) that allow you to purchase their stock without a broker. If you are planning on buying and holding or dollar cost averaging, this may be your best option. Search online or call or write the company whose stock you wish to buy to inquire whether they offer such a plan.  Pay attention to the fee schedule and select the plans that charge no or minimal fees.
Don’t be surprised if the price you pay — or receive, if you’re selling — is not the exact price you were quoted just seconds before. Bid and ask prices fluctuate constantly throughout the day. That’s why a market order is best used when buying stocks that don’t experience wide price swings — large, steady blue-chip stocks as opposed to smaller, more volatile companies.
Since stocks are highly volatile but have the most return potential, they are more appropriate for younger investors. In contrast, bonds are designed for predictability, making them better for older investors with lower risk tolerance. Cash investments are typically not a good idea unless you have lots of near-term liquidity needs. Determining the appropriate asset allocation for your investment strategy is a critical step to take.
If you’re wondering how to get into the stock market using direct investments, then you have a couple of options. Naturally, you can find a broker, and they will set everything up and help you get started. It makes sense to look around and try to find the best broker for you and your budget. Look at their track record and try to find previous client reviews. If they’re well-known for guiding clients to profitable investments, then they’re well worth your time.
Next, assuming you fall under the income limit eligibility requirements, you'll probably want to fund a Roth IRA up to the maximum contribution limits permissible. That is $5,500 for someone who is younger than 50 years old, and $6,500 for someone who is older than 50 years old ($5,500 base contribution + $1,000 catch-up contribution). If you are married, in most cases, you can each fund your own Roth IRA. Just make sure you invest the money you put in there — by default, IRA providers will park your money in a safe, low-return vehicle like a money market fund until you direct them otherwise, so decide on which mutual funds, ETFs, or other investments you want to put your money toward.
Preferred stock, meanwhile, represents an ownership share in a company as well, only if you hold preferred shares, you're entitled to a predetermined dividend that's likely to be larger than what common stockholders receive. Furthermore, in the event of a liquidation (which is when a company shuts down operations and sells off all of its assets), preferred shareholders get paid before common stockholders, making preferred shares a less risky investment. On the other hand, preferred shareholders don't get voting rights on company matters.
Mutual funds. A mutual fund is a basket that contains a bunch of different investments — often mostly stocks — that all have something in common, be it companies that together make up a market index (see the box for more about the joys of index funds), a particular asset class (bonds, international stocks) or a specific sector (companies in the energy industry, technology stocks). There are even mutual funds that invest solely in companies that adhere to certain ethical or environmental principles (aka socially responsible funds).
Popular financial goals include buying a home, paying for your child’s college, amassing a “rainy day” emergency fund, and saving for retirement. Rather than having a general goal such as “own a home,” set a specific goal: “Save $63,000 for a down-payment on a $311,000 house.” (Most home loans require a down payment of between 20% and 25% of the purchase price in order to attract the most affordable interest rate.) 
If you’re wondering how to invest in stocks online, we’ve got some good news for you – it’s easier than ever. You can open either an IRA, brokerage account, micro investing service, or other investment account type. You may want to consider the tax implications for the type of investing account you set up. For example, IRA accounts may be best for retirement while a taxable brokerage account is generally more flexible and may provide more investment options. You will also want to look into which investment products (stocks, mutual funds or ETFs) can be purchased with the type of account you open. Plus, as you build your wealth, a taxable brokerage with Ally Invest (formerly Trade King) can be used for investing more than your maximum yearly contribution. Alternatively, Betterment is a great option that can manage it for you. If you’d like to invest online, these stocks 101 tools help you to build knowledge and confidence.
Short selling can be dangerous, however, because it's not easy to predict a drop in price. If you use shorting for the purpose of speculation, be prepared to get burned sometimes. If the stock's price were to go up instead of down, you would be forced to buy the stock at a higher price than what was credited to you initially. If, on the other hand, you use shorting as a way to hedge your losses, it can actually be a good form of insurance.
Our second pick, Fidelity Investments offers new investors an easy-to-use website and quality on-site education. While Fidelity's learning center is impressive, the broker does a fantastic job with its in-house market research and financial educational articles, Fidelity Viewpoints. Of all the brokers, I share and bookmark Fidelity Viewpoint articles the most. As far as subject matter goes, the broker's retirement education is exceptional. Read full review
Robo-advisors like Wealthsimple, Wealthfront, and Betterment use algorithms to determine your investment strategy. You just plug in your time frame and risk tolerance and their computers do the rest. And because they’re targeted for a younger crowd, fees are rock bottom. Wealthsimple and Betterment both have no account minimum, while Wealthfront requires $500. Wealthsimple charges an annual 0.5% advising fee; Wealthfront and Betterment charge just 0.25%.
How much liquidity (i.e. resources that can easily be converted to cash) do you need for your shorter-term goals and to maintain a proper cash reserve? Don't invest in stocks until you have at least six to twelve months of living expenses in a savings account as an emergency fund in case you lose your job. If you have to liquidate stocks after holding them less than a year, you're merely speculating, not investing. The World's Worst Stock Investment Advice