How To Buy Shares Properly

One of the most popular and reliable ways to earn passive income is investing in stocks. Buying stocks is not as complicated as many may assume, but it requires doing some homework if you want to do it well. Whether you want to buy Apple, Tesla, or Amazon stocks, the procedure for doing it is the same for all.  

In this article, we will discuss all the steps you will have to go through to buy stocks of any public company in the world. Let’s dive in! 

Step #1: Find an online stockbroker  

Buying stocks in any of the top-end public companies in the USA or anywhere in the world requires using an online stockbroker. There are other alternatives, but using a stockbroker is always the easiest way. So, the very first step for buying stocks is finding a reliable stockbroker on the internet. 

Some of the most reliable stockbrokers include Fidelity, TD Ameritrade, E*TRADE, Charles Schwab, and many more. For beginners, we recommend Fidelity because it is the easiest to use. After choosing a stockbroker, you can go ahead to create an account. Make sure you use the right information because you will be required to verify your identity at some stage.  

Step #2: Choose the companies to invest in 

This is the most crucial step as it will determine how much money you will make over time. Start with the companies you are already familiar with and research their performance in previous years. Read the company’s annual reports to determine how much revenue and profits they have been generating over the years.  

Most of the online brokers’ websites will help you find this information pretty easily, more so if the company is popular. 

Step #3: Determine the number of shares to buy 

Now that you know which companies to invest in, it is time to determine the number of shares you intend to buy. This choice can easily be made by looking at the price of each share. The share prices of each company are different, so take time to look at the share prices of the companies you choose.  

Step #4: Choose stock order type  

There are two major stock order types; market orders and limit orders. Let me briefly explain what each of them means. With market orders, buying and selling stocks is done at the best available current market price of the shares.   

Limit orders give you the option to set your value for the stock, so your stockbroker will only initiate the purchase of the shares when the price drops to that amount. For example, if each share of a company is currently at $150, but in your analysis, you think $145 is the worthy price, your broker will hold your money and only invest when the asking price drops to $145.  

Step #5: Monitor your investments  

After successfully buying shares, you can now monitor how they perform over time and make adjustments where possible. You may even choose to sell your shares whenever you find it necessary. Making the right choices requires always following financial news about the companies you decided to invest in.  

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