Posted by forex at 7:13 AM
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1. Research different brokerage firms. Some of the popular online brokerages are E*Trade, Scottrade and TD Ameritrade (see Resources). It is important to research more than just the cost they charge for a commission. While a cheaper one might look nice, they may charge hidden fees. Look at what different firms offer in regard to types of securities. Some don't offer mutual funds.
2. Sign up and fund the account. To do this, request all necessary forms from the online site. These forms will either be mailed or can be downloaded from the site. Upon completion of the forms, mail them to the brokerage with the amount of money you want to invest. Some have minimums. However, almost all of the brokerages do offer more incentives to people who invest with more money.
3. Research different stocks. Before you can click the 'buy shares' button, you have to know which stocks to buy. While the S&P 500 is a safe bet because these are blue chip stocks, there are gold mines waiting to be found if you research enough. Look at the news, earning statements and any sorts of legal actions to determine what's going on with a stock.
4. Place your order using either a 'market' order or a 'limit' order. The first buys the stock at whatever price it currently is. The second buys the stock only at a price that you previously set. So, if you want to buy a stock at $15.54 a share and the stock falls to $15.54, you'll automatically buy it.
5. Manage your account. It is important to consistently watch your stocks to make sure that they are performing properly. If they're not, you can sell the stocks just as easily as you by the stocks.