You need a brokerage account, money to invest, and a decision about which stocks to buy

Buying stocks means opening an account with a brokerage firm, depositing money, and placing an order for shares. The brokerage holds your account, executes your trades, and keeps records for taxes. You can open an account online in minutes, but the actual purchase happens through their platform — you search for a stock by its ticker symbol (like AAPL for Apple), choose how many shares you want, and submit the order. The price you pay depends on the market price at the moment your order goes through.

Most brokerages charge no commission to buy or sell stocks anymore, though some may charge fees for certain account types or services. The real cost is the spread — the tiny difference between what buyers are willing to pay and what sellers are asking — which the brokerage captures. For a beginner, this cost is usually a few cents per share and happens automatically.

Key Takeaways

  • You must open a brokerage account with a firm like Fidelity, Charles Schwab, E-Trade, or Robinhood before you can buy any stock.
  • Most brokerages let you open an account online with a Social Security number, proof of address, and a bank account to fund it.
  • You buy stocks by searching for the ticker symbol in your brokerage's platform, entering the number of shares, and submitting a market or limit order.
  • Stock prices move constantly during market hours, so the price you see on your screen may not be the price you actually pay.
  • Beginners often start by buying individual stocks they understand or low-cost index funds that own hundreds of companies at once.

Choose a brokerage and open an account

A brokerage is a company licensed to buy and sell stocks on your behalf. Common brokerages for beginners include Fidelity, Charles Schwab, E-Trade, TD Ameritrade, and Robinhood. Each has a different interface, fee structure, and research tools, but all let you open an account online.

To open an account, you will need your Social Security number, a government-issued ID, your address, and a bank account to link for deposits. The process takes 10 to 15 minutes. Most brokerages offer a standard taxable brokerage account, which is the simplest type for a first-time buyer. Some also offer retirement accounts like IRAs, which have tax advantages but restrict when you can withdraw money.

After your account is open and verified (usually within one business day), you can deposit money from your bank. Most brokerages let you link your checking or savings account and transfer funds electronically. The money typically arrives within two to three business days, though some brokerages offer instant deposits up to a certain amount.

Decide how much money to invest and where it comes from

You can buy stocks with any amount of money, even a single share. However, you should only invest money you will not need for at least three to five years, because stock prices go up and down. If you need the money sooner, you risk selling at a loss.

Many beginners start with a small amount — $100 to $500 — to learn how the platform works without risking a large sum. Others set up automatic monthly deposits, which forces a regular habit and reduces the impact of buying at the wrong time. Your brokerage will show you the balance in your account and how much cash is available to invest.

Before you invest, make sure you have an emergency fund of three to six months of expenses in a savings account. Stocks are not a place to park money you might need suddenly.

Understand market orders versus limit orders

When you place an order to buy a stock, you choose between a market order and a limit order. A market order buys the stock at whatever price it is trading at right now. It executes almost instantly during market hours, but you do not know the exact price until the trade is done. If a stock is trading at $50 and you place a market order for 10 shares, you might pay $50.05 per share by the time the order goes through.

A limit order lets you set a maximum price you are willing to pay. If you set a limit of $50 per share, the order will only execute if the stock drops to $50 or lower. The advantage is price certainty; the disadvantage is that your order might never fill if the stock never reaches your price. Limit orders are useful if you are patient and want to avoid overpaying, but they can leave you sitting on the sidelines if the stock keeps rising.

For beginners, market orders are simpler and work fine if you are buying stocks you plan to hold for years. Limit orders make more sense if you are trying to buy at a specific price or if you are trading frequently.

Find stocks to buy and research before you order

You can search for stocks by company name or ticker symbol in your brokerage's platform. Every stock has a ticker — a one- to five-letter code. Apple is AAPL, Microsoft is MSFT, Tesla is TSLA. Your brokerage will show you the current price, the price history, and basic information about the company.

Before you buy, spend time reading about the company. Look at its earnings reports, read news articles, and understand what it does. Many beginners start by buying stocks in companies they know — the brands they use, the products they like. This is not a scientific approach, but it is better than picking randomly. Other beginners buy index funds instead, which own hundreds of stocks at once and reduce the risk of picking the wrong company.

Your brokerage usually provides research tools, stock screeners, and educational articles. Use them. Do not buy a stock because someone on social media recommended it or because it is trending. Do not buy because you think you can time the market and sell it higher tomorrow. Most people who try that lose money.

Place your order and monitor your position

Once you have decided what to buy, navigate to the "buy" or "trade" section of your brokerage platform. Enter the ticker symbol, the number of shares, and whether you want a market or limit order. Review the details — the stock name, the number of shares, the estimated cost — before you submit. After you submit, the order goes to the market.

During market hours (9:30 a.m. to 4 p.m. Eastern time on weekdays), your order will execute within seconds. After hours, your order waits until the market opens the next day. Once the trade is complete, the shares appear in your account and the cash is deducted from your balance. Your brokerage sends you a confirmation email with the details.

After you buy, you can watch your position in the "portfolio" or "holdings" section of your account. You will see the number of shares you own, the price you paid, the current price, and your gain or loss. Do not check this every day — it will tempt you to sell when prices drop. Most successful investors check their portfolios once a month or less.

Understand what happens after you buy

Once you own shares, you own a small piece of that company. If the company does well, the stock price usually rises and your shares become worth more. If the company struggles, the price falls. You can sell your shares anytime the market is open by placing a sell order, just like you placed a buy order.

Some stocks pay dividends — small cash payments to shareholders, usually quarterly. Your brokerage automatically deposits dividends into your account, and you can reinvest them or let them sit as cash. Dividends are taxed as income in the year you receive them, even if you do not sell the stock.

At the end of the year, your brokerage sends you a tax form (Form 1099-B) that reports all your trades and any gains or losses. If you sold a stock for more than you paid, you owe capital gains tax. If you sold for less, you can deduct the loss. Keep records of all your trades for your tax return.

Frequently Asked Questions

What is the minimum amount of money I need to start buying stocks?

There is no minimum. You can buy a single share of any stock, even if that share costs $1,000. However, most brokerages require a minimum deposit to open an account, which ranges from $0 to $500 depending on the firm. Once your account is open, you can invest any amount.

Can I buy stocks on my phone?

Yes. Every major brokerage has a mobile app that lets you buy and sell stocks from your phone. The process is the same as on a computer — search for the ticker, enter the number of shares, and submit your order. Make sure you are using the official app from your brokerage, not a third-party app.

What time of day should I place my order?

The stock market is open 9:30 a.m. to 4 p.m. Eastern time on weekdays. You can place orders anytime during those hours, and they execute within seconds. Orders placed before 9:30 a.m. or after 4 p.m. are held until the market opens the next day. There is no "best" time to buy if you are investing for years.

Do I have to pay taxes on stocks I own but have not sold?

No. You only owe taxes when you sell a stock for a profit (capital gains tax) or when you receive dividends. Simply owning a stock that goes up in value does not trigger a tax bill. However, keep records of what you paid so you can calculate your gain or loss when you eventually sell.

What if I want to sell my stock?

Selling works the same way as buying. Go to your holdings, find the stock you want to sell, and place a sell order. Choose market or limit order, enter the number of shares, and submit. The cash from the sale appears in your account within two business days, and you can withdraw it or use it to buy other stocks.