Buy Stocks in 6 Steps

Thinking about investing in stocks? Developing a healthy stock market investment portfolio doesn't have to be any more complicated than shopping at the supermarket. Do your research, start small, and don't be afraid to ask for help along the way. Just as you can trust your personal grocery shopper to pick out perfectly ripe avocados, you can also lean on the support of financial advisors when shopping for stocks. 

Financial advisors at your local credit union are there to help you with your financial goals, including stock investment education. Find a credit union near you with our Credit Union Locator Tool, and discover fresh stocks ripe for the picking! Meanwhile, learn how to invest in stocks in six easy steps. 

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How to Buy Stocks in 6 Steps

When buying stocks, you get to personalize your shopping experience. From determining the amount you’d like to invest to picking the stocks you’d like to buy, learn how to get started with our six-step guide. 

1. Decide the Amount You Want to Invest

How much you invest in the stock market is up to you and will depend on your income, expenses, and comfort level. With this in mind, many financial professionals recommend following the 50/30/20 rule when managing general finances and investments. The rule explains that 50% of your income should go to needs (housing, food, transportation), 30% should go to wants (trips, clothes, activities), and 20% should go to savings and investments (retirement, stocks). 

However, you should also factor in your comfort level when investing for the first time. For example, in his book How to Make Money in Stocks, William O'Neil recommends starting your investment journey with as little as $500 and growing from there. 

2. Research What Stocks You’d Like to Buy

Once you've determined how much you'd like to invest in the stock market, you can research what stocks you'd like to buy. There are three main types of stocks to consider: individual stocks, funds, and fractional shares.

3. Choose Where to Buy Stocks

You have choices when buying your groceries. For example, you can go to the supermarket, local grocer, or farmers market. Similarly, there are different places where you can buy stocks. Your options include:

4. Choose Order Type

When ordering stocks, it's not as simple as picking your stock and ringing it up with the cashier. There are two order-type methods available, and you must choose one before making a purchase. Each has its pros and cons, depending on your financial goals: 

5. Place Stock Order

The business of buying and selling stocks is fast-paced. It’s kind of like grocery shopping the day before Thanksgiving when everything is flying off the shelves. Except the stock market is like that every second! 

Once you’ve chosen stocks to buy, you can place your order through your financial advisor or online broker. Sellers are then matched with your order specifications, and the trade is confirmed. Just like that, you’ve invested in the stock market!

6. Continue to Build Out a Diversified Investment Portfolio

It’s no secret that the stock market can be volatile and comes with its share of risks. Therefore, you never want to put all your eggs in one basket when investing. For example, only buying stock in one company would put you at greater risk if something were to happen, like a corporate closure or bankruptcy. 

Instead, work to build out a diversified investment portfolio comprising a combination of individual stocks and funds. The right variety of stocks, bonds, and cash will keep your investments in check and offer more security. 

Further Resources on How to Invest in Stocks

Here are a few additional information sources to help you prepare for your first stock purchase or even look into alternative investments

Get Started on Your Stock Market Shopping List

Shopping at the supermarket always goes smoother if you have a shopping list guiding the way. Similarly, doing your research will make building your investment portfolio much easier. And, if you’re still wondering, “Should I invest in the stock market?” don’t hesitate to ask for help from the experts. Use our Credit Union Locator to find a credit union near you with financial advisors who can help you navigate the aisles of stocks like a pro. 

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Did you know?

Many credit unions offer financial advising services to help their members make important investment decisions. Unlike large brokerages, credit unions provide a personal touch with lower fees.  

Find the right Credit Union for you

There are more than 5000 credit unions to choose from across the U.S.