You’ve learned about the stock market, how it works, and what types of investments there are… and now you’re wondering how to buy stocks online. Let’s break it down so we can eliminate the confusion around buying investments online, and get you investing.
Disclaimer: Please note that while we are talking about finance and investing on this page, this blog and any other content produced by Clo Bare, LLC is for educational and entertainment purposes only. Always consult with a financial professional if you have questions about your own situation.
It’s time, my friends.
You’ve already learned about retirement accounts.
Got your HYSA in check and your emergency fund saved.
And you understand your different investment options.
It’s time to talk about how to buy stocks, or really… how to buy any standard investment online.
How to Buy a Stock or Investment Online
1) Pick a brokerage.
A brokerage is just a fancy term for a store where you can buy investments from the stock market. Most of them (if not all) are online these days.
With brokerages, you have TONS of options… which can be a good thing and a bad thing. It’s a good thing because you’ve got choices… and it’s a bad thing because the choices can overwhelm you into not making a single decision.
Like when we go stand in the beverage aisle and see that there are 60 different brands of sparkling water, each with 6 different flavors and combinations. I mean HOW DOES ONE CHOOSE.
Welp, let me help you out with that.
Vanguard and Fidelity
My two favorite places to buy investment are Vanguard and Fidelity (not sponsored), and here’s why.
- Vanguard and Fidelity both offer low-cost investment options with little to no fees.
- Fidelity allows you to invest with as little as a dollar.
- Vanguard is the OG when it comes to index fund investing, and they have some of the oldest index funds in the game.
- Fidelity has some fee free index funds– the only brokerage I know of that does this.
Both Fidelity and Vanguard are pretty consistently rated as the top brokerages for low-cost investing by a variety of publications including:
I personally think they’re the best, and I lean towards Fidelity because Fidelity has no minimums to start investing, which can make investing more accessible for folks.
But here’s the thing…
I’m going to let you in on a little secret.
There are a lot of great brokerages out there if you’d like to explore beyond Fidelity or Vanguard.
There’s Charles Schwab, Interactive Brokers, TD Ameritrade, Ally, Sofi, etc.
The key things to look at when shopping for a brokerage are
- Low-fees for the investments you’d like to purchase
- No minimums
- No account fees/trading fees/etc
These days, it’s pretty easy to find a brokerage that meets those needs.
2) Connect Your Bank Account & Transfer Money
Alright, you’ve done the hard part– you’ve picked a brokerage! You’ve followed instructions and opened an account!
Now, your next step?
You have to connect a funding source.
Now for you, that may come from an old account, like an old IRA or and old 401(k), but I would be willing to bet that most people are going to be funding their new account with a bank account.
Most online brokerages make this easy as pie– and it should only take you a few minutes, as long as you have your bank account numbers and/or logins easily accessible.
3) Buy Your First Investment!
Now, let’s get to the meat of this conversation. HOW THE HECK DO YOU BUY AN INVESTMENT.
Now most of the steps are the same if you’re using a regular ole’ brokerage like Vanguard or Fidelity, but I’m going to use screenshots from Fidelity to highlight how to buy an investment.
Then, I’ll also link to tutorials for other brokerages as well, so you won’t feel left hanging.
1. Login to your account.
2. Select Trade
3. Click on the drop down of investment options and select what you'd like to purchase.
4. Select which account you want to do this in (if you have multiple accounts).
5. Type in the ticker symbol of the investment you'd like to buy.
See the box where it says symbol? That’s where you’ll write in the ticker symbol of the investment you’d like to buy. You’ll notice as you start to type, a few different selections will become available.
Notice though where it says “cash available to trade”? You need to make sure there’s cash in that account in order to buy something.
If there’s no cash available, you’ll either need to sell something in the account or transfer more money into the account.
6. Preview order.
Once you’ve selected an investment to buy, you’ll see something like the below. Notice the “NTF” next to “Fidelity International Index Fund”? That just means “no transaction fee”.
Then you’ll see the price to buy into this mutual fund, $43.97 in this case, and you’ll notice that it says “Investment Minimum $0.00”. So that means even though the price to get in is $43.97, Fidelity has removed minimums, so you can buy a portion of this mutual fund for as little as a dollar.
Below that is a link to a prospectus, which you can review for more information on the investment you’re buying.
Then you’ll select “Buy” from the “Action” dropdown menu.
Enter in the dollar amount you wish to purchase.
And click “Preview Order”. This will show you your order so you can double check everything is correct.
Notice at the top it will say “this trade will be completed at the next available price” essentially meaning that the $43.97 quote for the mutual fund is an estimate, and may change between when you review the order and press buy.
Since with Fidelity you have no minimums and are buying a set dollar amount, I wouldn’t spend too much time worrying about that number. The price may go down slightly which will allow you to purchase a larger portion of the mutual fund for the dollar amount you were already planning on investing, or the price may go up slightly which would have the reverse effect.
Cause you just bought your first investment, my friend!!!
Proud of you 🙂
Tutorials on How to Buy Stocks Online
Now, if everything you read felt like you were reading another language?
Then may I invite you to my free investing class this month? It’s a good time 🙂
But since folks may be investing in a variety of different brokerages, I wanted to link to a few tutorials for you to explore.
Hope that helps get you started! And of course..
If you want to learn more?
Come meet me live in my free investing class– the only way to pick my brain.