What does one need to buy stock?

Question

I want to invest so i was planning on buying some stocks. The only problem is i'm not quite sure how. Can i buy n sell on my own or do i have to go through a broker? Hows all it done?

Answer 1

You cannot trade or invest in stocks unless you open an account with a stock broker. Since investing in stocks has been much facilitated by the advent of computers and internet, you can easily register your account online with any stock brokerage firm. Before you open an account, you must find out the minimum amount you have to deposit with your broker irrespective of the type of account you opt for from the website of your brokerage firm. Each broker has his own minimum account limit, which may range from $500 to $10,000.

The guiding principle before accepting the minimum amount deposit should be your budget and also the facilities and services that the brokerage offers for a particular level of minimum amount deposit. A comparison-shopping in this respect would prove highly beneficial in long term trading. While it may be true that the less minimum deposit you pay, the less you get in form of services as well, there are some brokerage firms that deliver much more value than the minimum deposit they demand.

A good brokerage firm may demand a minimum deposit for example $ 2,500 but may deliver much more value in terms of lower commissions, as low as $1.50 to $ 3.00 per equity trade, free dividend reinvestment plans and a large number of free trades spread over a long time. They may not even charge you any thing if your account becomes inactive for some time. If you are beginner in stock investing, these benefits can prove to be of immense value in form of risk free investments and savings.

The next step is to choose an account. You can choose an:

1.Individual Account

2.Joint Account

1.Individual Account

As the name suggests, an individual account is an investment account that is opened for one person. You must have reached the age of majority, i.e., you should be 18 years old or above in your state of residence. The age of majority entitles you to full legal rights as an adult. Besides, you must also be a US citizen or a resident alien with a valid social security number. A resident alien is a person who is a non-US citizen but legally resides in the US and also pays the taxes.

2. Joint Account

A joint account is an investment account that is opened for two or more people with the proviso that both people who open accounts should have reached the age of majority in their state of residence. Joint account can either be set up as Joint Tenants with Rights of Survivorship-JTWROS- --or as Joint Tenants in Common-JTIC.

Opening both kinds of accounts is an easy process. It takes about five minutes to open an account on line. All you need to do is to select the account type you want to open and fill in your personal information.

You also have to read and confirm the subscriber agreements, which include the 'account agreement', 'customer acknowledgment of risk' and 'day trading risk disclosure statement'.

Besides these you are also required to comply with the exchange rules. So you have to read, understand and comply with both the New York Stock Exchange and the New York Stock Exchange data subscriber agreements. You should read the agreement as you scroll it down to the bottom. Read both the sections of the agreement and check both the boxes before you move on.

The next step is to choose your user ID and password. You also have to provide your email id for correspondence. You also need to select one of the four secret questions and provide answer to them. This information is needed to assist you to get your password in case you forget about it.

You have also to provide your personal information including your name, date of birth, residential address, marital status, employment, number of dependents, phone numbers, mother's maiden name, social security number and country of citizenship. You have also to provide your financial information including your employer's name, annual income, net worth and liquid net worth.

The answer to these and a few other simple questions completes the account opening process and you are ready to start investing in stocks and shares immediately thereafter.

The tutorials below will also be useful for you.

http://ezinearticles.com/?How-To-Invest-...



http://ezinearticles.com/?How-To-Buy-Sto...

I use SogoTrade.

They offer cheap stock trading at $1.50 - $3.00.

Some of the features this brokerage offers:

1. $1.50 - $3.00 Online Equity Trades

2. Fast Order Execution

3. Excellent Customer Service

4. Scheduled Investments and Fractional Shares

5. 3 Great Trading Platforms: SogoTrade, SogoElite, Laser

6. Enhanced Online Security and SIPC Protection

7. Powerful Trading Technology

8. No Account Inactivity or Account Maintenance Fees

9. Free Dividend Reinvestments Service

10. Complementary Stock News and Stock Charts

Do some research and you will find the best broker.

Answer 2

You find a broker tell him/her what stock you want to buy and he/she will buy the stock for you.

If your investing then may wanna talk to a financial advisor. If you just wanna do some trading then learn about the stock market and how it works by watching Bloomberg, CNBC, Check out http://finance.yahoo.com/ and see how news effects stocks and build on what you know. Read some books as well.

You can buy and sell on your own by getting a share certificate but I dont know anything about this.

Answer 3

You could purchase stocks without a broker through a dividend reinvestment program (DRIP) directly through the company who's stock you wish to buy.  However, I would recommend purchasing stock through a broker instead.  There are two types of brokers though.  You can choose either a full-service broker or a discount broker.  A full-service broker like Wells Fargo will basically hold your hand and guide you while a discount broker like Etrade will allow you to make your own decisions.  Of course, the latter is cheaper because less service means less cost.  There are deep discount brokers out there.  Some like Zecco, even offer free trades.  However, remember that you always get what you pay for.  Less cost can mean less features as well such as little to none research tools.

Personally, I use Firstrade.  It's not the cheapest discount broker and is not the most expensive one either.  I find that it's the perfect balance of service and cost for me, and it provides all the features I am looking for.  You have to decide what you are looking for before you can decide on a broker.

Answer 4

You can buy and sell on your own if you open an online account.

But please try and not be in such a hurry. The stock market is not where I would put my money these days. Prices have dropped but I think they could still go lower.

Maybe someone here knows of sites where you can invest with a dummy portfolio? I mean, getting fake shares but for the true market prices without paying any money until you have learned some more.

Answer 5

You sound like a novice.  Please stick to Vanguard mutual funds.  I've been with them for some 15 years and am generally happy with their returns and service and FEES.

VG is noted for their index funds, which have extremely low fees and. of course, just the returns which each fund mimics,  less the modest fees the fund charges.

Historically, index funds outperform managed funds!  Vanguard

is investor-owned, meaning there is no "middleman" taking fees.   TY