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How to start to buy stocks online 

3/7/2013

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1- Open an account
The best way to start, we feel, is to open an account with one of the main online brokers in the market. You do not want to go for the cheapest one. If you pay with peanuts all you get is monkeys. And you want to start with a site that has easy-to-use straightforward tools. Press here for our lite of brokerage sites

2- Learn the tools
Go to the brokerage site's tutorial to get familiar with their tools. Some sites will even call you to propose an online, over-the-phone, demo. All the help you can get is good help.

3- Credit you account
Wire a limited amount of money. Invest no more than you are ready to lose, but too little money is not interesting as the trading commisions migh hit your profits. Between $200 and $1000 is good to start. 

4- Your first investment should be safe

And when you place you first bet. But do not buy a specific stock ! Buy an Index Tracker Exchange Traded Fund (ETF), like an Index Tracker that follows the S&P500. It is actually bought the same way as buying a stock but it is a much safer investment as your money is invested in 500 companies instead of 1. 

3 very serious and large companies have set Exchange Traded Funds (ETFs) that follow the movements of the S&P500:
  • iShares S&P 500 Index (ETF)
  • SPDR &S&P 500 ETF Trust
  • VANGUARD FUNDS PLC VANGUARD S&P 500 ETF

5- Then you can start stock picking

When you feel familiar with your site and start to understand how things work, then it might be good to start really doing some stock picking. But to be interesting you need more money than $1000. 


So you credit your account with more money in your account before starting to pick your companies yourself. The reason is that you should invest in at least 6-7 companies, so that your risk is split. More companies mean less risk for your investment. 


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