19 March 2020

Six Simple Steps to Buy Shares Online

You've probably imagined many times how you're going to buy shares in a company and make enough money to travel the world and last you for the rest of your life.
Achieving this is not easy, but you have to start somewhere. Investing in shares online is one of the best ways to reach this goal. And the good news is you that can do all of this completely online, from the comfort of your own home.

In this article, we will explain jargon-free, in plain English, how to buy shares in a company. It's not as easy as watching your favorite TV show, but don’t worry, it's not rocket science either.

People usually ask about how to invest in a company because they either want to make money (profits) or gain some trading experience. Both are possible, and can also be fun, if you select the right stocks.

You can make a profit if your share pays dividends or its price increases. If you do this in the long run, these profits can add up and even make you a millionaire, as it happened with Mr. Gremel: the now 98-year-old investor bought 20 Walgreens shares for $1,000 in 1953, and today they are worth $2 million.

As you gain experience, you will improve your financial literacy. This is one of the best long-term investments. Have your friends ever talked about investments or the stock market, and you had no clue what any of it meant? Don't worry, once you start investing and learning more about it, this won't happen again. You'll understand better how the stock market works and how it influences the economy, as well as your everyday life.

Last but not least, as a shareholder you will be part of a company's story. Have you ever wanted to sit in the same room with Warren Buffet, and participate in a Berkshire Hathaway annual meeting? If you buy some Berkshire shares, you'll have the chance, all you have to do is master the buying of the shares.

Let's take a look at the six steps for how to buy shares online!

The six-step plan to buying shares online

Buying shares online is not rocket science. Follow this simple six-step plan:
  1. Find a good online broker
  2. Open an investment account
  3. Upload money to your account
  4. Find a stock you want to buy
  5. Buy the stock
  6. Review your share positions regularly
Step 1: Find a good online broker
First of all, you need to find a good online broker. Some banks offer this to their customers, so ask your bank whether this is on offer. Alternatively, you can choose any of the trusted members of recognized organizations such as the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC).

When choosing a broker, it is important to take into account the broker’s fees, trading platform, accessible markets to trade, and how easy it is to open an account. Safety is very important, but you do not need to worry about this if you are using your bank or brokers who are members of recognized organizations, like FINRA, SIPC or other similar well-recognised and trusted organizations.

Step 2: Open an investment account
After finding your online broker, you need to open an investment account. This can usually be done with your bank as well, if they offer it; or it can also easily be done with online brokers. The investment account is basically what you need to start buying shares online. Think of it as a bank account where in addition to holding cash, you can also shares. Opening an account usually takes a couple of days, although at some banks or brokers you can get it done within a day.

Step 3: Upload money to your account
In order to buy shares online, you need to have money on your investment account. Usually, you can choose between a bank transfer or depositing funds via credit/debit card. If you are using a broker, check with them because some would even allow you fund your investment account via Paypal, e.g. at eToro.

Are you interested in broker deposits? Then compare broker deposits.

Step 4: Find a stock you want to buy
After uploading some money into your account, you can start searching for the best target stocks to buy. You can get inspiration from others' ideas or you can do your own research. Most people listen to others, but if you put some time and energy into your research, the payoff is usually bigger and you can learn a lot more from it. Investment ideas can come from your broker in the form of stock reports and analyses, but you can also use other, independent research. The financial news and investment courses can also be useful in learning how to pick a winning stock.

Step 5: Buy the stock
You have the account, the cash, and the stock you want to buy. Now all you need to do is press the 'Buy' button. You log in to your online trading platform, find the stock you have selected, enter the number of shares you wish to buy, and click 'Buy,' which will initiate the purchase of shares.

When placing an order, you can choose from different order types. A market order buys immediately at the current market price, while a limit order allows you to specify the exact price at which you want to buy the shares. Find more details on order types here.

Step 6: Review your share positions regularly
You're done, you've bought the shares, they are yours. Now it is key to monitor your investments. This basically means following your investment strategy. If you bought the shares with the goal of holding for a longer term, you might participate at the company's annual meeting and collect all the news and information about the firm.

For short-term buyers, position management could mean setting up the stop-loss price of where to cut losses, and the target price of where you want to sell the shares with a profit.

Now that you have mastered the 6 steps of buying shares, we will next be publishing the top 5 brokers specially selected for you. So subscribe to SaibaWorld to keep a date with us!

1 comment:

  1. I am thankful to this blog giving unique and helpful knowledge about this topic. Online Stock Broker