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How to Buy Stocks in 3 Simple Steps

Buying Stocks Made Easy


  1.  The first step to acquiring stock, which is the most important, is having a decent savings. Know that with investing ( as in anything), there are NO Guarantees.  You are assuming the risk of gaining or losing .  This savings must be money that you are not depending on or need within the next 6 months.   I’d recommend a  savings of at least $1000.  $1000 won’t  make or break you… Some of us have bills we paid in which we can’t even remember what the $1000 was for.

  2.  Go online, Choose and Create an investing account.   Then, link your bank account to them. Here are some choices.  Capital One Investing was formerly ING, inc’s Sharebuilder before being bought out by Capital One Bank.  Now, Etrade has purchased Capital One Investing (Recommended). Also, there are other platforms such as Robinhood, Stash, Scott Trade, and TD Ameritrade.  They are all competitive in terms of price per trade. It truly depends on how active of a trader you will be. Some other companies offer a monthly fee and unlimited trades such as Charles Scwabb .  This would be recommended for a trader with high volumes of trades (25+ a year).

  3. Download the Investing app of your choice on your phone. Then you can start investing. Buying stock: You can look up any popular company you want once you know their Ticker- 1-6 letter abbreviation.  Example. Google’s Ticker is “GOOG”, Sprint Corp’s is “S”, Facebook’s is “Fb” and Apple’s is “AAPL”.  The price indicated by that ticker is the price of 1 share/stock of the company. Prices may go up or down.

Things to Keep in Mind
  • Investing takes a lot of patience and discipline. Always research a company’s financial performance before jumping in.  Make sure they are not in too much debt.  Pay close attention to Balance Sheets, news updates, and credible opinions.
  • Determine a Strategy. There are two basic types of buyer-markets always referred to….
  • Bull and Bear:
    Bulls: Bulls are considered to be the more aggressive/optimistic buyers (Short term). Typically in a bull market, Individuals will Buy stock when the economy is good in high anticipation that the stocks will continuously rise.                                                                                                                                                                                                                                                                           Bears: Bears are considered to be the more reserved/ pessimistic buyers (long term).  Bears always anticipate falling prices .  In bear markets, individuals will either hold out, sell, or will hold stocks indefinitely till the market clears of trouble.
  • Because I recommend starting off with a small $1000, You will have to be bull-ish.
  • Starting off, look for valuable brands at an affordable price. You want to buy a stock as low as possible so that you may buy as many as possible.  $1000 isn’t a lot in this market.  The goal is to get to $5000.
  • Taxes : Of course Uncle Sam won’t make getting rich too easy.  You must consider capitals gains and taxable income when trading stocks successfully.  Short term gains are taxed at a higher rate than if you held a stock long term (stocks held over one year).  Different strategies must be employed to accomplish your overall goal of wealth.
 

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