So, you've decided to invest in the stock market. You even have some ideas about which stocks you want to buy. But how do you actually buy shares of your favorite companies?
Stock
In this article, we'll discuss the basics of how to buy your first stocks in an easy-to-understand way. Follow these simple steps, and you'll be on your way to building a stock portfolio of your own.
How to buy
How do you actually buy shares of stock?
Fortunately, the process of buying stock online is relatively quick and easy.
- First, you'll need to open a brokerage account.
- Next, you must decide which stocks you'd like to buy.
- After you've picked your stock(s), determine how many shares you want to buy.
- You'll then decide which type of stock order is best. Typically, this means either a market order or a limit order.
- Finally, you'll enter your order, hit the buy button, and become a shareholder.
- You can then build your portfolio by repeating the process.
Here's a more detailed, step-by-step guide to start your stock investing journey.
The first 3 steps
1. Open a brokerage account
First, you'll need an investing account, known as a brokerage account, to buy stock. Think of a brokerage account as a bank account -- but instead of holding money, it's designed to hold investments.
It's important to consider two main factors when selecting an online stock brokerage:
What does the brokerage offer?
Does your brokerage offer every product and service you need? Some brokerages provide excellent educational resources for new investors. Others provide access to stock research and analytical tools. Some brokerages even maintain branches where you can receive in-person guidance.
Perhaps other features, such as the ability to trade international stocks or buy fractional shares, are important to you. Of course, many investors simply want an easy-to-use app for buying and selling stocks, and some platforms certainly offer that.
Is the brokerage platform user-friendly?
Is the brokerage platform easy to navigate? If you want to trade using your mobile device, the brokerage's mobile trading app must be easy to use. Most brokerages allow you to use play money to experience their trading platforms before you invest your own money, so try a few to decide which platform you like most.
Most major online brokerages, including the older heavyweights such as Charles Schwab (SCHW -0.34%) and Fidelity, have eliminated commissions on online stock trades. This largely removes cost from the equation when choosing a brokerage platform, especially if your focus is on trading stocks.
One very important thing to know is that brokers typically publish a fee schedule that breaks down all the potential costs of being their customer. It should be fairly easy to find by searching for "[broker name] fee schedule."
Once you've chosen a brokerage, you must complete a new investment account application. This process is typically quick, but you'll need to have certain information handy, such as a driver's license and Social Security number.
Social Security Number (SSN)
You'll also need your bank account information to fund your new brokerage account using your checking or savings accounts. You can choose to open a standard brokerage account or establish an individual retirement account (IRA), which comes with some pretty nice tax advantages.
2. Decide which stocks you want to buy
In this article, we won't go too deep into the many possible methods of researching and selecting individual stocks to buy. However, the next step is to determine which stocks you'd like to purchase. Here are a couple of pointers:
Follow a buy-and-hold strategy
Buy stocks because you believe their underlying businesses will be worth more in a few years than they are today. Don't buy a stock just because you think it will perform well over the next few weeks or months.
Also, day trading -- buying and selling a stock on the same day or even within a few weeks -- is best left to the professionals.
Diversify your holdings
Don't put all your money into just one or two stocks. Even if you're investing only a relatively small amount of money to start, diversify your portfolio by buying a few shares of several different stocks. With commission-free trading and fractional share investing available through many brokers, you can create a diversified stock portfolio with a relatively small amount of money.
Learn more about how to choose which stocks to buy by checking out our comprehensive guide to investing in the stock market. Or check out some of the top stocks to buy right now if you need some inspiration.
3. Decide how many shares to buy
To determine how many shares you should buy, first decide how much money you want to invest in each stock that interests you and then divide this amount by the stock's current share price. You can find stock prices on your brokerage's platform by searching for either the stock's ticker symbol or the company's name.
Some brokerages allow you to buy or sell fractional shares. This is especially common with app-focused brokers. If your brokerage trades fractional shares, you can purchase any dollar amount of a stock regardless of its share price. If your broker doesn't, you must round down to the nearest whole number of shares to determine how many you can buy.
For example, let's say you want to invest $1,000 in Microsoft (MSFT 0.05%). You use Microsoft's stock ticker symbol (MSFT) to check its share price and find that it was about $490 in June 2025. Dividing $1,000 by this share price indicates you can buy as many as 2.04 shares.
Stock Ticker
If your broker doesn't trade fractional shares, you would purchase two shares of Microsoft stock and have $20 left over. With fractional shares, you can invest your entire $1,000.
The last 3 steps
4. Choose an order type
Different order types exist for stock purchases. The type of order you place to buy stock specifies the conditions under which you want your broker to complete your transaction.
A market order -- which instructs your broker to buy the stock immediately and at the best available price -- is typically the best order type for buy-and-hold investors.
On the other hand, you may want to place a limit order, which indicates to your broker the maximum price you're willing to pay for a stock.
For example, let's say a stock is currently trading for $20.50 per share. You want to buy it only when the price is less than $20, so you place a limit order. Your broker then buys shares on your behalf only if the stock's price dips below $20.
| Order Type | What It Is | When to Use It |
|---|---|---|
| Market Order | Instructs the broker to immediately buy stock at the best available price | For most buy-and-hold investments, especially stocks with high trading volumes |
| Limit Order | Instructs the broker to execute the order only if a stock is trading at or below a certain price | If you want to wait for a pullback to buy a stock or the stock is thinly traded |
| Stop-Loss Order | Instructs the broker to execute the order if a stock reaches a certain price | If you have a specific exit point in mind for a stock investment, either to the upside or downside |
5. Place the stock order with your brokerage
To place a stock order, go to the appropriate section of your online broker's platform and enter the required information. Your brokerage platform or app typically asks for the company name or stock ticker and whether you want to buy or sell shares (the exact process varies slightly). You'll also enter either the dollar amount you want to spend or the number of shares you want to buy.
After you tap the button to place your order, your stock purchase should be executed in seconds (if you've made a market order). If you place a limit order, the order will execute only when the stock price is less than or equal to the limit price you've set.
6. Build your portfolio
The final step in this process is to build out your investment portfolio. Now that you have a brokerage account and know the basics of buying and selling stocks, you can keep adding money to your brokerage account and investing in stocks you'd like to own.
As a final thought, it can be tempting to monitor your stocks' performance every day, especially at first. But it's important not to get too caught up in the short-term market noise and maintain a long-term mindset.
Certainly, you can and should read quarterly earnings reports and subscribe to news alerts. But if your stocks' prices decline, don't sell in a panic. And if your stocks' prices rise by a few dollars, resist the urge to cash out. The best and easiest way to build wealth over time is to buy shares of great companies and hold them for as long as they remain great companies.
Why buy stocks?
Why buy stocks?
There are some good reasons to buy stocks, but the No. 1 reason is to build wealth over long periods of time. Stocks can be rather volatile over the short term but have historically been the best-performing major asset class over periods of decades.
Stocks can also be valuable tools for retirees or anyone looking to generate a stream of passive income. Many stocks pay dividends, which are distributions of a company's profits made to shareholders, and there are some with incredibly consistent track records of not only paying dividends but also increasing them over time.
Related investing topics
Common types of stocks to invest in
There are far too many categories and subcategories of stocks to discuss all of them here, but here are some of the common categories:
- Growth stocks: Companies that are growing sales (or are expected to) faster than their peers or the overall stock market average.
- Value stocks: Companies whose stocks are trading for a discount to the intrinsic value of the business.
- Dividend stocks: Stocks that distribute some of the company's profits to investors in the form of dividends.
- Blue chip stocks: Stocks of long-established businesses with consistent profitability and financial strength.
- Large-cap stocks: A term used to refer to the largest companies in the stock market. Different sources define this with different thresholds, but the traditional definition is a $10 billion market capitalization or higher.
- Mid-cap stocks: Traditionally defined as a company with a market cap ranging from $2 billion to $10 billion.
- Small-cap stocks: Stocks of smaller companies, usually defined as less than $2 billion in market cap.
Again, this is not an exhaustive list of stock categories. But these are some of the major types you should be aware of. And it's worth noting that stocks can (and usually do) fit into more than one of these categories. For example, you can have a large-cap stock that's also a dividend stock.
FAQ
How to buy stocks FAQ
Can I buy stocks on my own without a broker?
You don't need a full-service broker to buy stocks in the modern era, and you don't necessarily need to interact at all with a human to buy stocks. You do need a brokerage account to buy and sell stocks, but this can be as simple as downloading a stock-trading app to your smartphone.
How should a beginner invest in stocks?
It is easier than ever for beginners to buy stocks, thanks to the emergence of several user-friendly trading platforms, many of which allow them to do so quickly and easily through an app. If you don't want to pick your own stocks, however, another good option for beginners is to use a robo-advisor service, which can invest in exchange-traded funds (ETFs) on your behalf.
Can I buy stocks with $100?
Even if a stock is trading for more than $100 per share, you still may be able to invest with just $100. Many brokers offer fractional share investing, which can allow you to buy less than a full share of stock -- as little as a dollar's worth in many cases.
How much should I invest?
It's tough to give an exact number since everyone's financial circumstances are different. However, some good guidelines include not investing any money you'll need within the next several years and not investing if you aren't willing to watch the value of your investments rise and fall regularly.
How much should a beginner invest in stocks?
There's no perfect amount for a beginner to invest in stocks since every investor has a different income and overall financial situation. However, it's a good idea to invest in stocks with money you know you won't need for at least the next few years.
