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When you invest in a stock, you’re hoping the company grows and performs well over time. That’s how you end up making money.
One of the best ways for beginners to learn how to invest in stocks is to put money in an online investment account and purchase stocks from there.
You don’t have to have a lot of money to start investing. Many brokerages allow you to open an investing account with $0, and then you just have to purchase stock. Some brokers also offer paper trading, which lets you learn how to buy and sell with stock market simulators before you invest any real money.
How to invest in stocks in 6 steps
To invest in stocks, open an online brokerage account, add money to the account, and purchase stocks or stock-based funds from there. You can also invest in stocks through a robo-advisor or a financial advisor.
» Ready to invest? Check out the best online brokers for stock trading
If you’re ready to invest in stocks yourself, this six-step process may help you get started.
1. Decide how you want to invest in the stock market
There are several ways to approach stock investing. Choose the option below that best how hands-on you’d like to be.
A. “I’d like to choose stocks and stock funds on my own.” Keep reading. This article breaks down how to choose the right account for your needs and how to compare stock investments.
» Learn how to choose a brokerage account
B. “I’d like an expert to manage the process for me.” You may be a good candidate for a robo-advisor, a service that invests your money for you for a small fee. Virtually all of the major brokerage firms and many independent advisors offer these services.
» View our picks for the best robo-advisors
C. “I’d like to start investing in my workplace 401(k).” This is one of the most common ways for beginners to start investing.
This may be a great option for most people who have access to an employer-sponsored 401(k) because many plans offer a match. Employer matches are basically free money: If your employer offers a 4% match and you make $100,000 a year, if you contribute $4,000 to your 401(k) so will your employer. That means you get $4,000 for free.
» Learn more about 401(k) plans
2. Choose an investment account
Once you know how you want to invest, you’re ready to shop for an investment account, also known as a brokerage account. There are several types of investment accounts, and it’s a good idea to figure out which account is right for you. For example, a Roth IRA comes with significant tax benefits while a standard brokerage account does not.
For those who would like a little help, opening an investment account through a robo-advisor is a sensible option. We break down both processes below.
Keep in mind, an investment account is just an account, it’s not an investment. You have to add money to it and then purchase investments from there in order to have your money grow in value.
» Check out our roundup of the best online brokerages for stock trading
The DIY option: opening an investment account
An online investment account likely offers your quickest and least expensive path to buying stocks, funds and a variety of other investments. With a broker, you can open an individual retirement account, also known as an IRA, or you can open a taxable brokerage account if you’re already saving adequately for retirement in an employer 401(k) or other plan.
» View our top picks for IRA accounts
We have a guide to opening a brokerage account if you need a deep dive. You’ll want to evaluate brokers based on factors such as costs, investment selection and investor research and tools.
The passive option: opening a robo-advisor account
A robo-advisor offers the benefits of stock investing, but doesn’t require its owner to do the legwork required to pick individual investments. Robo-advisor services provide complete investment management: These companies will ask you about your investing goals during the onboarding process and then build you a portfolio designed to achieve those aims.
This may sound expensive, but the management fees here are generally a fraction of the cost of what a human investment manager would charge: Most robo-advisors charge about 0.25% of your account balance. And yes — you can also get an IRA at a robo-advisor if you wish.
If you choose to open an account at a robo-advisor, you probably don’t need to read further in this article — the rest is just for those DIY types.
How to invest in stocks in 6 steps
To invest in stocks, open an online brokerage account, add money to the account, and purchase stocks or stock-based funds from there. You can also invest in stocks through a robo-advisor or a financial advisor.
» Ready to invest? Check out the best online brokers for stock trading
If you’re ready to invest in stocks yourself, this six-step process may help you get started.
1. Decide how you want to invest in the stock market
There are several ways to approach stock investing. Choose the option below that best how hands-on you’d like to be.
A. “I’d like to choose stocks and stock funds on my own.” Keep reading. This article breaks down how to choose the right account for your needs and how to compare stock investments.
» Learn how to choose a brokerage account
B. “I’d like an expert to manage the process for me.” You may be a good candidate for a robo-advisor, a service that invests your money for you for a small fee. Virtually all of the major brokerage firms and many independent advisors offer these services.
» View our picks for the best robo-advisors
C. “I’d like to start investing in my workplace 401(k).” This is one of the most common ways for beginners to start investing.
This may be a great option for most people who have access to an employer-sponsored 401(k) because many plans offer a match. Employer matches are basically free money: If your employer offers a 4% match and you make $100,000 a year, if you contribute $4,000 to your 401(k) so will your employer. That means you get $4,000 for free.
» Learn more about 401(k) plans
2. Choose an investment account
Once you know how you want to invest, you’re ready to shop for an investment account, also known as a brokerage account. There are several types of investment accounts, and it’s a good idea to figure out which account is right for you. For example, a Roth IRA comes with significant tax benefits while a standard brokerage account does not.
For those who would like a little help, opening an investment account through a robo-advisor is a sensible option. We break down both processes below.
Keep in mind, an investment account is just an account, it’s not an investment. You have to add money to it and then purchase investments from there in order to have your money grow in value.
» Check out our roundup of the best online brokerages for stock trading
The DIY option: opening an investment account
An online investment account likely offers your quickest and least expensive path to buying stocks, funds and a variety of other investments. With a broker, you can open an individual retirement account, also known as an IRA, or you can open a taxable brokerage account if you’re already saving adequately for retirement in an employer 401(k) or other plan.
» View our top picks for IRA accounts
We have a guide to opening a brokerage account if you need a deep dive. You’ll want to evaluate brokers based on factors such as costs, investment selection and investor research and tools.
The passive option: opening a robo-advisor account
A robo-advisor offers the benefits of stock investing, but doesn’t require its owner to do the legwork required to pick individual investments. Robo-advisor services provide complete investment management: These companies will ask you about your investing goals during the onboarding process and then build you a portfolio designed to achieve those aims.
This may sound expensive, but the management fees here are generally a fraction of the cost of what a human investment manager would charge: Most robo-advisors charge about 0.25% of your account balance. And yes — you can also get an IRA at a robo-advisor if you wish.
If you choose to open an account at a robo-advisor, you probably don’t need to read further in this article — the rest is just for those DIY types.