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If you want to make money in stocks the first thing to figure out is how. So how do you invest in stocks?
In this article we answer we cover the basics of how to invest in stocks in a brief, easy to read format.
What You Need To Invest In Stocks
The first thing you need to invest in stocks is to put some money into an account that lets you buy/sell stocks.
Open a Brokerage Account
You can put some money in an account with a brokerage company. These are companies like Charles Schwab, Fidelity, eTrade and TD Ameritrade.
An account with a company like this will give you the most freedom in how you invest in stocks. You’ll be able to log into your account and trade in stocks, ETFs and mutual funds on your own.
Get a Financial Advisor
Another option to invest in stocks is to open an account with a financial advisor. There are a number of firms with financial advisors around with Edward Jones being the biggest.
If you go this route, your financial advisor will help you make investment decisions and make your stock trades for you. This could be a good option if you don’t really know what you’re doing in the stock market. However, you have to factor in the fees for using a financial advisor and make sure they are worth it in your case.
Retirement Account
You can also invest in stocks through a retirement account like a 401K you may have through work. If you invest in a retirement plan through work, however, you will likely have a limited number of investment options and may not be able to buy individual stocks.
How To Buy a Stock
Now that you have your account, you are ready to invest in stocks. You have a few options here to.
Buy Shares of an Individual Stock
Love Tesla and think it’s a great company? Impressed with Disney after your last vacation or from your Disney Plus subscription? Know about a little, under the radar tech company that’s trading on the market?
Then you can go to your brokerage account and simply buy a share (or a few shares) of stock in that company.
Buy Shares of an ETF or Mutual Fund
Overwhelmed by all the stocks out there? Or want to spread your money around an invest in a number of different stocks at the same time?
Then you can buy shares of an ETF or mutual fund. These are investment options that allow you make one investment in a number of different stocks. For example, you can buy shares of an ETF or mutual fund that invests in all the stocks in the S&P 500 index. If you buy that you’d be investing in shares of every company in that index.
