Technology has given so many more people access to incredible resources.
Financial technology has evolved to allow more people to take charge of their own finances in a non-traditional way. Buying stocks online is easier than ever, but that first trade can be confusing, and you may even have some learning pains.
If you’re ready to invest in stocks online, keep reading to find out how you can have a successful first trade.
Before you can invest in stock online, you will need to sign up for a self-directed brokerage account.
This type of account will allow you to invest in stocks on your own without a broker doing it for you. There is a personal preference for investing on your own or with a broker, but doing it on your own has fewer fees. However, you will have to do all the research on your own and come up with your own investment strategy.
There are many different self-directed brokerage accounts to choose from, such as:
Many of these accounts offer similar experiences, but do your research on each to find what you like. Make sure you pay attention to any fees, minimum amount needed, and other features that could make a difference.
For example, if you bank with Bank of America, you may want to consider Merrill Edge because they have certain perks if you have a certain amount in a brokerage account with them.
On the other hand, you may want an account with the best online app because you want to have the best user experience when it comes to buying stocks online. Again, if you do your research, you can find the best brokerage for your needs.
Once you’ve signed up for a self-directed brokerage account, the next step is to find a stock you want to invest in.
To do this, use online resources like Yahoo Finance or Seeking Alpha. These websites can give you an idea of stocks to look into and some additional information about them.
You can even read finance articles online or watch reputable finance YouTubers talk about stocks they are picking this week. Always be cautious of taking financial advice from an online resource. Not everyone has your best interests.
When you pick your first stock, try to find a company that resonates with you.
It may be a popular stock like Apple, but you may also find a smaller company whose mission you resonate with is one you want to invest in. The idea is to find something that interests you to keep you in the game.
Having that interest will make it more interesting and keep you motivated to do your research.
Once you have decided on the first stock you want to invest in online, you can make your first trade!
But even before you do this, make a budget on how much you plan to invest and deposit that into your brokerage account. It may take a few days for this transaction to take place, so start thinking about how much money you want to invest before you actually make your first trade.
Your first trade will be a memorable one. It’s hard to really understand how to invest online without making your first trade. Once you’ve done it the first time, it is very easy.
Certain apps allow you to invest a specific dollar amount, while others only allow full stocks to be purchased (this can impact your brokerage decision if you are a beginner and may only have enough money for a partial stock).
Make sure to click the trade button and not the sell button. If this is your first trade, sell may not even show up, but once you own a stock, buying and selling a stock all happen on the same page.
Once you’ve input which stock and how much you want to invest in, double-check your trade before you finalize it.
Sometimes this happens right away, and other times it can take a few minutes or even up to an hour. Be patient, but once the trade is completed, you can see the investment show up in your portfolio.
Now that you’ve made your first trade, you can start thinking of your overall personal investing strategy.
It’s important to think about your long-term financial goals and how investing can support that. This step should come after your first trade because that first trade is a great learning opportunity to see how to actually make a trade and how to pick your first stock.
Over time, you will find the stocks that you want to invest in and make a plan for how much you plan to invest each year. By doing your research, you can find a strategy that will help you reach your financial goals.
Photo by Joshua Mayo on Unsplash
