So we’ve gone through general basics of investing and the stock market. Now its time to start practicing what you preach. I know you’re probably thinking:
Tasia, I get these concepts on investing, but exactly how do I actually buy a stock?
Well thanks to a blog suggestion from my gorgeous line sister Sarah Bowers, I’ll explain how to do that here.
In order to participate in the market you must have some form of a brokerage account. A brokerage account is held with an investment company in which you can manage yourself or allow someone else to manage. Like any other account, you must have an initial deposit of anywhere between $500 and $2,500. That amount you initially need varies by broker, and this is one key thing to take note of when researching a broker. Another point to look for while researching a broker are the transaction fees. If you plan to manage your own portfolio, generally you’ll have a transaction fee from $4.00 to $9.00/trade. Should you let someone else manage your portfolio, they allow you to do research and call them to discuss your goals and make purchases on your behalf. But this type of transaction will cost you the upwards of $25.00/trade. Technology and services is also a key metric to use when deciding on a broker. Does the broker have a mobile platform that is easy to use? Do they make the online trading platform easy to use? Do they offer you online customer support so you can ask questions and is this service free of charge? Are the charts and graphs provided for your research clear to understand? Just a few things to look at when it comes the tech and services.
Tasia’s Recommendation: Be smart. Be confident. Make your own decisions from the broker you chose to the stocks you buy.
The broker’s job is to work on your behalf. They have to make sure you are successful so that you will be comfortable continuing business with them. They need to provide you the best brokerage account environment so that you can make clear minded and important decisions using the tools they provide.
Here are a few key notable brokers with individual brokerage accounts that are available to you:
|Name||Initial Deposit||Equity Transaction Fees||Link to Website|
*FolioInvesting doesnt have an initial deposit but they do have annual service fees between $60-$290/year
Know that the above companies have various account options, including variety of IRA accounts, joint brokerage accounts, 529 College savings plans, checking accounts and so many more services. I’ve linked all the websites to those companies so you can explore each of them for yourself because each of them has special offerings that may speak to what you need from a broker. And this list is far from exhaustive. There are so many companies and so many ways to start investing I can’t address them all in one post.
If you don’t think you’re ready to have a self managed/co-managed brokerage account, there is also a mobile app called Acorns that you can download on your phone that automatically invests the pennies on a dollar each transaction you make into diversified mutual fund like portfolios. Its only $1/month for accounts with less than $5,000 and 0.25%/year of the account value after that limit. If you’re looking just to start and not have to manage the investments, Acorns may be a good idea to start.
One of the best teachers is experience and I can say with all honesty that the longer I’ve been researching and building my actual portfolios, the more I know and more comfortable I am with my decision making. Trust me, I haven’t always made profitable purchases and plenty times I’ve been able to get the max from an investment and sell just in time. I know this post could (hopefully and prayerfully) generate a lot of questions. Please leave them in the comments here, on the Facebook Like page or on my personal page. Just make sure you ask the question because someone else may have the exact same question and be able to learn from the response.
Til next post folks.