First-Time Investors: Discover a Simple, Powerful Way to Buy Stocks Online

By Demietra Williams

Invest in Your Future

Have you considered buying stocks online but didn’t know where to begin? I’ve been there. Twelve years ago, I thought about purchasing stocks, but found the whole process to be intimidating. The terminology was unfamiliar. I didn’t know how to open an online brokerage account or how to buy shares. 

I conquered my fears. I studied the basic concepts of how the market worked and I began to develop my own investment strategy. Armed with more knowledge, I bought my first share in 2008. 

Buy Fractional Shares – A Powerful Tool

Actually, I bought a fractional share

A fractional share is a position in a stock equal to less than a whole share. Let’s say a whole share of a company costs $200. You buy $100 worth. This means you own a fraction, or 50 percent, of a share. 

You can capitalize on this powerful way to first enter the stock market. In most cases, it’s free to open an online brokerage account and you can start investing with just $50. 

Around 2008, a share of Apple cost almost $800. I bought a fractional share worth $200 and decided to invest the same amount each month. I gained a whole share in about four months. It was worth the wait. I still hold those positions and over the years I’ve netted a lot of gains from them.

Act Within Thirty Days

You’re in control of your financial future. Commit to making your first online trade within the next thirty days.  

If you have a balance on a high interest credit card, your emergency savings won’t cover three to six months of expenses, or you don’t currently participate in your company’s retirement plan, you may need additional time.

According to a Merrill Lynch study, women reported that the biggest financial regret they had, was not investing more. Particularly for black women, the impact of not trading stocks is even more noteworthy.

A 2014 study by Credit Suisse and Brandeis University reports that inactivity in stock market trading is a leading contributor for lower rates of wealth among black women.  Fortunately, there are resources available. The Stocks and Stilettos Society is an online forum that provides tools that help women create winning stock investment strategies.

You can get ahead of the curve by acting today.

Demystify the Stock Market Lingo

Once I learned some basic concepts, trading stocks became fun.

Here are a few terms and definitions to help get you started:

Stock: A stake in a company that gets you a portion of the company’s assets and profits, equal to the amount of stocks you own. Also called a share or equity. 

Brokerage Account: Type of investment account that is needed to buy and sell stocks, bonds, and other investment products. Also referred to as a trading account. Most brokerage accounts are held online.

Trade: The action of buying or selling stocks.

Build Your Strategy: Identify Long-term Goals

Investing in the stock market requires patience. It can take five to ten years to realize long-term gains. 

Think about your future in big, broad strokes. Where do you want to be in ten years?  Do you want to be debt-free? What does your work-life balance look like? 

My daughter was five years old when I opened my first online trading account.  I desired to save toward her college tuition. I wouldn’t necessarily liquidate my portfolio to pay her tuition, but I wanted to create options for myself. 

Define some of your goals. This could include: 

  • Paying off student loans
  • Making a significant down payment on a house
  • Increasing your net worth
  • Investing in the start-up of your own business

Build Your Strategy: Invest Monthly

You’ve thought about your goals. 

When I first bought stocks, I lived in a high-cost city and paid the elevated rent that went along with it. Bills flickered around me like gnats. I covered my daughter’s school tuition, childcare and student loans.

I waited for a future event to occur before I’d invest. I’d say something like, “Once I get my income tax return or pay off my car loan, then I’ll invest.” I realized that a perfect moment wouldn’t occur.  I decided to just do it. I took $200 from my savings and used it as my initial investment. 

Evaluate your budget and see where you can trim some fat. Choose an amount and commit to investing each month.

What Stocks Should You Pick?

Think of the type of investor you intend to be. If you’re more conservative, you might look at time resistant or safe stocks. 

You could also think about the goods or services that you use frequently. Do you love any of those products? You might be interested in researching those companies and buying some of their stocks. 

You can also choose stocks by industry. For example, you could look at a mixture of retail and energy stocks.

In full disclosure, I’m attracted to tech stocks.  I own positions in each of the FAANG (Facebook, Amazon, Apple, Netflix, and Google) stocks. I observed the consistently high demand for their services and analyzed their historical performance. The sticker prices are a bit frothy, if not expensive. However, you can start to invest in those companies by buying fractional shares.

Find the niche that appeals to you but don’t overwhelm yourself. To begin, concentrate on just a couple stocks. Write them down and refer to your list when it’s time to buy.

Choose your Online Brokerage Firm

We’re close to the finish line. Next, you need to open an online trading account. Pick a brokerage firm that charges little or no commission fees, plus allows you to buy fractional shares.  Both Charles Schwab and Fidelity offer these features. 

To open your online account, you’ll have to provide basic personal info. You’ll also need to select a method to get funds deposited into your account. It may take a few days to get your account approved, but I’ve found that linking your bank account to your trading account to be the easiest and fastest way. 

Ready, Set, Trade

Once funds are available, you’re ready to start buying shares.

While you’re logged into your account, navigate to the option to trade. Enter the name of the stock (use the list you previously created) and then designate how much you want to allocate for each trade. 

Let’s say you’re starting with a $100 investment. You could buy $50 worth of shares in two individual companies.  Place your trade as a market order. If market conditions allow, your order will be executed immediately.  Also, make sure that your trade is effective for the day. If for some reason, your order can’t be fulfilled, your trade will become null when the market closes. There are more complicated options to choose from, but I suggest starting with these basic parameters. 

Now, submit your order.

Congratulations, you’ve made your first trade in the stock market! Keep the commitment to yourself to invest each month. There will be market ups and down.  Hold steady. In time, you’ll see the value of your investments grow. 

About the Author

Demietra founded and runs her own freelance writing business that specializes in content marketing, ghostwriting, and memoir writing. She loves to help small businesses and entrepreneurs build their brand. She also enjoys writing about personal finance and self-transformation topics. She lives in central New Jersey with her husband and daughter. You can visit her at newyorktechwriter.com.

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