Buying your first stock is simpler than it looks. You need a brokerage account, money to invest and a plan. Here's the whole process from start to finish, plus the mistakes to avoid.
1. Get your finances ready
Before investing, make sure you have an emergency fund in savings and that any high-interest debt, such as credit cards, is under control. Only invest money you won't need for at least several years, because stocks can fall sharply in the short term. See how to start investing with little money.
2. Choose an account type
- Taxable brokerage account: flexible, no contribution limits, but gains and dividends are taxed.
- Roth or traditional IRA: tax advantages for retirement savings. See Roth vs. traditional IRA.
- Workplace 401(k): if your employer offers a match, take it first. See 401(k) vs. IRA.
Learn more in what is a brokerage account.
3. Pick a broker
A broker holds your investments and places trades for you. Most large US brokers charge $0 commissions on online stock and ETF trades and have no account minimum. Compare fees, fractional shares, recurring investments, account types and app quality on our best stock brokers page. Opening an account usually takes a few minutes online.
4. Fund the account
Link your bank account and transfer the money you plan to invest. Consider setting up an automatic monthly transfer so you keep investing without having to think about it. See dollar-cost averaging.
5. Decide what to buy
Many beginners start with a broad, low-cost index fund or ETF, which spreads your money across hundreds of companies in one purchase. See what is an ETF and index funds vs. individual stocks.
If you want individual stocks, research the business first:
- Find ideas with the stock screener.
- Open each company's stock page to review its chart, key statistics and financials.
- Check the StockEngine Score and strengths and risks in AI Insights.
- Follow the 7-step stock analysis checklist.
6. Place your order
Search for the ticker symbol, then choose how many shares to buy, or a dollar amount if your broker offers fractional shares.
- A market order buys right away at the current price.
- A limit order only buys at your chosen price or better, giving you more control.
For most purchases during regular market hours (9:30 a.m. to 4 p.m. ET), either works for large, heavily traded stocks; limit orders are safer for smaller stocks and outside regular hours. See market vs. limit orders.
7. Track and keep going
Add your holdings to the free portfolio tracker to follow gains, allocation and performance against the S&P 500. Keep investing regularly, reinvest dividends, and review your portfolio a few times a year rather than every day.
Common beginner mistakes
- Putting too much in one stock. Diversify. See how to diversify your portfolio.
- Trying to time the market or chasing whatever went up last week.
- Panic selling during downturns. See bull vs. bear markets.
- Ignoring fees and taxes. See capital gains tax on stocks.
- Investing money you'll need soon.
Time in the market, diversification and low costs matter far more than finding the perfect stock. Start small, stay consistent and keep learning with our free investing guides.
This article is educational and not investment advice.
Frequently asked questions
How much money do I need to start buying stocks?
Very little. Most large US brokers have no account minimum and charge $0 commissions on online stock and ETF trades, and many offer fractional shares, so you can start with a few dollars.
Can I buy stocks without a broker?
In practice, you need a brokerage account to buy and sell stocks on an exchange. A few companies offer direct stock purchase plans, but an online broker is the simplest option for most people.
Should I buy individual stocks or an index fund first?
Many beginners start with a broad, low-cost index fund or ETF because it spreads money across hundreds of companies in one purchase. Individual stocks can be added later once you're comfortable researching companies.
StockEngine articles are for education only and are not investment advice. Some links may be affiliate links.