We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.
Finance

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

How do I Invest in Stocks?

By Jeremy Laukkonen
Updated: May 17, 2024
Views: 2,978
Share

In order to invest in stocks, you typically must enter into a fiscal relationship with a stock broker of some kind. Stock brokers were historically brick and mortar businesses that would manage your investment portfolio. You would typically provide them with a fixed amount of money to invest, after which they would either buy the stocks you requested or else make purchases and sales according to a plan to which you agreed. Internet-based stock brokers may allow you access to the tools and information you need to do much of this work yourself. When using an Internet brokerage to invest in stocks, you are typically responsible for entering your own orders, determining which type of order you want, and setting the buy or sell price you are willing to pay.

To successfully invest in stocks, it is typically suggested that you seek to obtain a diversified portfolio and take a long view on your investments. A diversified portfolio is one that contains stocks from different companies, different industries, and often various other financial instruments. Taking a long view simply means investing for the future and trusting that your diversified portfolio will increase in value over time, regardless of whether or not prices drop in the short term.

You may also invest in stocks on a more short-term basis, buying and selling to take profits on a daily or weekly basis. This form of stock investing is often known as day trading. It may be lucrative, though it also comes with the accompanying risks of losing large amounts of money.

If you choose to use physical brokerage firm, brokers will often work with you to manage your portfolio. These types of brokers are able to help you set up different strategies depending on whether you are looking for short-term gains with the accompanying risks or are investing for the future. On the other hand, when working with an Internet brokerage, this kind of research and planning is often up to you. These brokerages usually offer research tools and information to teach you about different investment strategies and financial investments. They will sometimes also have agents available to offer advice over the phone.

In addition to purchasing and selling individual stocks, there are also other ways to invest in stocks that may be somewhat less of a risk. One of these is the mutual fund, which is a portfolio of stocks that many people invest in together. A fund manager uses the pooled money to manage the portfolio according to a strategy you will typically agree to prior to investing. The advantage of these types of investments is that if one stock in the fund plummets, the overall value of the fund may remain steady or even increase, as other funds may be performing well.

Share
WiseGeek is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.

Editors' Picks

Discussion Comments
Share
https://www.wisegeek.net/how-do-i-invest-in-stocks.htm
Copy this link
WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.

WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.