Where to buy shares of stock

Don't worry. Stock investing doesn't have to be complicated. For most people, stock market investing means choosing among these two investment types:.

Stock mutual funds or exchange-traded funds. Mutual funds let you purchase small pieces of many different stocks in a single transaction. When you invest in a fund, you also own small pieces of each of those companies. You can put several funds together to build a diversified portfolio.

Note that stock mutual funds are also sometimes called equity mutual funds. Individual stocks. Building a diversified portfolio out of many individual stocks is possible, but it takes a significant investment. The upside of stock mutual funds is that they are inherently diversified, which lessens your risk.

For the vast majority of investors — particularly those who are investing their retirement savings — a portfolio comprised mostly of mutual funds is the clear choice. But mutual funds are unlikely to rise in meteoric fashion as some individual stocks might. The upside of individual stocks is that a wise pick can pay off handsomely, but the odds that any individual stock will make you rich are exceedingly slim.

Read our review of Morningstar. New investors often have two questions in this step of the process:. How much money do I need to start investing in stocks? The amount of money you need to buy an individual stock depends on how expensive the shares are.

Share prices can range from just a few dollars to a few thousand dollars. If you want mutual funds and have a small budget, an exchange-traded fund ETF may be your best bet. How much money should I invest in stocks? Individual stocks are another story. A general rule of thumb is to keep these to a small portion of your investment portfolio. Stock market investments have proven to be one of the best ways to grow long-term wealth. Stock investing is filled with intricate strategies and approaches, yet some of the most successful investors have done little more than stick with stock market basics.

If your portfolio is too heavily weighted in one sector or industry, consider buying stocks or funds in a different sector to build more diversification. Finally, pay attention to geographic diversification, too. You can purchase international stock mutual funds to get this exposure. Yes, if you approach it responsibly. One of the best is stock mutual funds, which are an easy and low-cost way for beginners to invest in the stock market. These funds are available within your k , IRA or any taxable brokerage account.

The other option, as referenced above, is a robo-advisor , which will build and manage a portfolio for you for a small fee. Generally, yes, investing apps are safe to use. Even in these instances, your funds are typically still safe, but losing temporary access to your money is still a legitimate concern. However, investing small amounts comes with a challenge: diversifying your portfolio. Diversification, by nature, involves spreading your money around.

The less money you have, the harder it is to spread. One solution is to invest in stock index funds and ETFs. These often have low investment minimums and ETFs are purchased for a share price that could be lower still , and some brokers, like Fidelity and Charles Schwab, offer index funds with no minimum at all. And, index funds and ETFs cure the diversification issue because they hold many different stocks within a single fund.

The last thing we'll say on this: Investing is a long-term game, so you shouldn't invest money you might need in the short term. That includes a cash cushion for emergencies. Regular investments over time, even small ones, can really add up. Use our investment calculator to see how compounding returns work in investing. With a limit order, the trade may not happen if the price doesn't get to where you want it. Limit orders are best if you're trading a large number of shares or for smaller stocks that have greater price volatility.

As you track your stocks along with the performance of those companies you invested in, be wary of cashing out too soon. Money you invest in individual stocks should be money you are comfortable having tied up for at least the next five years.

To maximize your returns, your best bet is to hold for the long term, especially during times of volatility. In fact, not giving your investments time to grow is one of the biggest investing mistakes experts say to avoid. These six offer the widest range of investment options, user-friendly technology, quality customer support and educational resources. We then analyzed and compared each one based on the following factors:. After reviewing the above features, we based our recommendations on platforms offering the widest range of investment options, robust educational tools and resources, user-friendly technology, as well as the lowest fees and expense ratios.

We also looked into each company's customer support structure, available avenues of communication and app reviews. Note that with all trading platforms, there are no guarantees you'll earn a certain rate of return or current investment options will always be available. To determine the best approach for your specific investment goals, speaking with a reputable fiduciary investment advisor is recommended.

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LightStream Personal Loans. We may receive a commission from affiliate partner links. From your research you can develop an investment thesis for the stock or discard it and look at another potential candidate. That is, you want to invest long term and think like the owner of a business, not a stock trader looking to make a quick buck.

When you find an attractive stock, note its ticker symbol, typically a three- or four-letter code. Buying a stock is only part of the process of being a stockholder. And as the company performs well, you can allocate more money to the position. Then you can add more stocks to your portfolio as your expertise grows. Index funds often own hundreds of stocks, offering the benefit of diversification without the extra work of analyzing and evaluating individual stocks.

Here are some of the best index funds. A brokerage account allows you to buy stocks and other securities such as ETFs , options, mutual funds, bonds and more. You can open an account with an online brokerage, a full-service brokerage a more expensive choice or a trading app such as Robinhood or Webull. Any of these choices will allow you to buy stock in publicly traded companies.

However, your bank account or other financial accounts will not allow you to purchase stocks. But your bank may operate a brokerage, so you can open an account with the brokerage and buy stock there. Morgan Chase offers J.

The stock market goes up an average of 10 percent annually , though the returns can fluctuate a lot from year to year. Some years stocks may fall 20 to 30 percent, while in other years they may rise similarly. In other words, research shows that passive investing tends to outperform active investing. Any realized gains on your investments will create a tax liability in taxable accounts that is, accounts that are not an IRA , k or other tax-advantaged accounts.

The tax rate you pay depends on your income and how long you owned the security. How We Make Money. Editorial disclosure. James Royal. Written by. Bankrate senior reporter James F. Royal, Ph. Edited By Brian Beers.

Edited by. Brian Beers.