December 13, 2017 | 7:12 am
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How to Invest in Stocks Online for Beginners?

stocksInvesting in the stock market plays an essential role in obtaining financial freedom and reaching personal financial goals. Setting up an online stock account makes the process of investing easy, but only when it is handled in an appropriate manner. Online stock investing differs from working with a broker or directly with a bank, but that does not mean it is a complicated process.

Setting Up an Account

Setting up an account is the first step of purchasing stocks online. The Wall Street Journal recommends setting up an account through an electronic brokerage if you are planning to purchase stocks online.

Keep in mind that some large brokerage companies offer online accounts and services, so using a company that specializes in online services is not necessary. Individuals should discuss online purchases and options with a brokerage company before determining if a specific option is appropriate for personal goals.

Electronic brokerage companies offer a greater amount of flexibilities when compared to larger companies and it may not be necessary to discuss your plans or goals with a financial professional before starting your investments. Buying stocks online gives you a greater amount of freedom and personal control when compared to working with a broker.

Transfer Funds

When the account is opened, transfer funds from a checking or savings account to the brokerage account. The duration of time before the funds are available for investing will depend on the brokerage company, but it will usually take at least one to three business days.

When the funds are in the account and available for investing, it is possible to start purchasing stocks.

Research Stocks

Brokerage companies offer information about different companies and stocks, so take advantage of the resources that are available. When you work with electronic brokerage companies, the amount of support and information that is available is usually limited.

Investopedia reports that online brokers will only take and submit the orders that you put into the account. You will usually have limited interactions with a broker directly, but some basic resources and tools are usually available on the account.

In some cases, an online brokerage will take phone calls to answer questions about the system and the process of investing. Limited research tools are usually available, but the exact amount of information will depend on the specific brokerage and their policies.

Find out as much as possible about the company and the stocks that you are considering before investing. The information provides the confidence to purchase stocks that are appropriate for personal goals.

Buy Stocks

Buying stocks through an online brokerage is a simple process. In most cases, you will type in the symbol or name of the company that you want to purchase. You then type in the number of shares and push a “buy” or “purchase” button.

In most cases, the purchase will go through within a short period of time. Selling stocks is usually a similar process. Many brokerage companies also allow individuals to purchase options as well as stocks, but the risk associated with options is greater than the risk associated with stocks due to the short-term nature of the investment.

If the cost of the stock is higher than you want to pay, then you can also put in a limit order. A limit order means that you will put in the price that you are willing to pay for the stock and the purchase will not go through until the price reaches your specific target.

Purchasing stocks through an online service offers the opportunity to maintain full control over your investments and plans. Depending on your goals and preferences, the best way to handle investing will vary significantly. When you want control over your investments or if you have a limited budget for investing, an online brokerage company offers the flexibility and budget-friendly options that you need to reach your financial goals.

We highly recommend that you take some time to watch this short video made by an experienced Wall Street trader to understand how to buy stocks online.