How to buy stocks

It never occured to us at stocktrades.ca that there was a need to explain how to actually buy stocks. We thought that selecting winners and avoiding taxes were the ultimate needs of our readers. How wrong we were beacause recently we were asked just that. How do you buy stocks? First of all stocks are different from other investments because they are pieces of an actual company. Unlike mutual funds which are investments that are comprised of any number of companies and are repackaged and sold to an end user. Additionally there is more than one type of stock, for examples stocks can be purchased based on the class of shares, different classes offer different privalages. But for this article we will assume that common stock is being purchased.To buy or sell any stock you need to get in contact with a broker. A broker is a liscenced individual or corporation that will purchase and sell shares in the market on your behalf. Brokers are trained in the legal requirements that need to be followed in order to make these transactions, ie. registering trades with the appropriate governing authorities.The most basic decision an investor must make is the type of brokerage house they want representing them. As of today there are essentially two options, discount brokerage or full service brokerage. This decsion is far from easy to make. A discount broker will not offer guidence as to which purchases you make. Discount brokerages are online entities like etrade.ca, or questtrade.ca. More often than not these companies will provide a research platform to view fundemental data for companies trading on exchanges that you are investing in. However, if you are reading this article on how to buy stocks chances are that you don't know how to choose them either. Conversely at a full service broker you will be provided with research based on your investing style and risk tolerance. Essentially you will have a guide to help you navigate through different investments. A full service brokerage will provide you with an account manager that will be there to answer questions that may arise about your future or current investments. In addition to the differences listed above between full service and discount brokerages there is another important consideration to keep in mind and that is whether you want to keep stocks inside your RRSP or not. There is plenty of information on RRSPs on stocktrades.ca. Before you make any decsions it is important to keep in mind the tax saving benefits of RRSPs as opposed to holding stocks outside of a plan which will then be subject to full taxation.

Online Stock Market Investing

Before a person becomes involved in online stock market investing, there are several areas of investigation which would be profitable. There are many pages of information available to the would-be investor, and books, newsletters and seminars abound where one can get stock market investing advice. Before spending a cent of hard-earned cash, though, it is possible to do plenty of research of your own in the library or on the Internet. A general overview of the procedures involved in investing might be needed, as well as an idea of where to go to obtain stock market investing advice. Some free or low cost online tools even allow the investor to practice trades with games that simulate the stock market.


Set some boundaries before beginning to invest. Contrary to what some commercials for online stock market investing might imply, investing is not a miraculous source of easy money. Stocks do generally perform well for the investor over a long period of time, compared to some other investments. No investment is guaranteed to make a profit. There are always some risks involved and a person should not invest with funds which will be needed in the short term. In fact, a wise step for the potential investor to begin with is to get one's own finances in order.

Before seeking stock market investing advice, it would be prudent to take the time to investigate one's own financial situation. Unless a person knows how his or her money is presently being spent, and can apply wise financial procedures to eliminate credit card debt, it would be best to avoid the risks involved in online stock market investing. Until such discipline can be applied to current debts, no one could be expected to be able to deal with the more subtle and intricate layers involved in investing in the market. Debt is costing a certain percentage each month, so it is best to use any extra funds to eliminate that black hole in the finances. In the meantime, investigate ways to improve the situation. If an employer is offering matching funds for 401k contributions, this is an investment which has a guaranteed return, for the money the employee invests is immediately doubled.

Owning stock is having a small part of the ownership in a corporation. The stock market is generally broken down into a number of sectors, thus making it possible to compare how a company is performing relative to those in similar businesses. Any significant differences should be investigated. Reports can be obtained from companies to ascertain the health of a company or to be made aware of future plans which may affect investment decisions. Hours of work can be saved by utilizing stock screening programs to narrow down choices.

People invest for several types of reasons. One philosophy is investing for growth. Perhaps a company shows signs of becoming outstanding in its sector. Selling shares may allow it to obtain the capital needed to expand, without going into debt. In return, the stockholder can vote on members of the board of directors and share in major decisions, as well as possibly reap dividends. Risk is involved in that more businesses fail than succeed.

Another reason to invest may be for value. The investor comes to realize that the company's product or service has seemingly been overlooked, and that it is only a matter of time before the stock's value will rise. Careful research is necessary, though, to be sure that this is really the case and that there are no underlying problems which may limit success. The most conservative philosophy of investing is simply the desire to obtain income from the stock. These investors seek companies which will pay decent dividends on a consistent basis. Of course, many investors use a combination of these reasons during their lifetime. A younger person may be more willing or able to shoulder a larger proportion of risk in order to reap the possible benefits, while an investor approaching retirement may choose to invest more conservatively. One's philosophy and life situation may also influence whether one chooses to invest through a discount broker or employ a full-service broker. Both are able to make trades; the latter will also research various investments and give stock market investing advice. Be careful to check for details pertaining to fees or other services before signing any contracts. The final say in investing money should remain in the investor's hands.

Remember that when stocks plunge, unless the investor actually sells the stock, the loss is only on paper. The likelihood of a healthy company eventually rebounding is substantial. The art of online stock market investing lies in being able to hold onto the shares long enough to realize a profit, and, in a downturn, being able to sell before losing the value of the investment. Each investor must set a reasonable percentage to guide decisions about buying or selling. Be careful not to succumb to greed, which can be destructive and lead to repercussions in other areas of life. As Jesus warned in Luke 12:15, "...Take heed, and beware of covetousness: for a man's life consisteth not in the abundance of the things which he possesseth." If the investor is careful to do the proper research, to spend only funds which are not needed for daily living expenses, and to guard against greed, online stock market investing can remain one of a series of wise financial decisions instead of becoming a stressful and consuming chase after elusive riches.

How to Buy Stocks Online

How to Buy Stocks Online

Buying stocks online is a fairly straightforward process. Gone are the days of calling up your broker, unless you want to. This financial article will guide you through the process of buying stocks online.

Finding an Online Broker

The first step is to start an account with an online broker. Since you’re just starting out, focus your selection process on the larger names out there.

I recommend looking at Scottrade.com at some point in your search. They offer many nice features and $7 trades—unless the stock is under $1 per share.

If you’re someone who will need personal attention—face-to-face meetings, phone conversations—look for a full-service online broker.

If the online broker has a local office, that’s a plus. For instance, Scottrade.com has one in my area. When I created my account, I went to the office with a check to fund my account. It was a simple process.

Buying Stocks Online

Okay, you now have your online broker and you’re ready to go. After you log into your account, you can buy stocks online.

To buy a stock online, you’ll need the stock’s symbol. For instance, Goog is Google’s stock symbol. If you don’t know the stock’s symbol, the online broker should have a symbol lookup feature. If not, you’ll find one at finance.yahoo.com.

Next, you’ll need to specify how many shares you want.

Never do market orders. Always do limit orders. When you do a limit order, you specify a price, which ensures that you get into or out of a stock on your terms.

For instance, here’s an example of a limit order:

Stock: Google (GOOG)

Shares: 100

Limit Price: $560

When I place this order, I’m saying that I want 100 shares of Google and I’m willing to pay up to $560 per share for them.

Additionally, you can select an option called “All or None.” When you select this, your order will only be filled if all the shares can be purchased.

So, let’s image that I didn’t select this option. It would be possible for me to receive under 100 shares at or below my limit price.

Another option is the order’s duration. I could put that order for Google stock in for just today (market close) or I can keep it open until I cancel it, which is called “Good Until Canceled.”

Stock Price

When you look up a stock, there will be two prices shown—Bid and Ask. The Ask price is the price that sellers are willing to sell for at that moment. The Bid price is the price buyers are willing to buy at for that moment.

Take a look at this stock overview.

As you can see, Google’s Bid is $552.50 and its Ask is $552.98.

If you were to put in a limit order for $552, you could be “in line” for a little bit, because the Ask price is $552.98.

But, limit orders are your way of saying: “I’m only getting into this stock at my price.”

A less knowledgeable investor would simply use a market order. The order would most likely be executed fast, but he or she would pay “top dollar” for the stock. This isn’t wise.

Buying Stocks Recap

Let’s recap how an order to buy stocks works.

  1. Enter the stock symbol.
  2. Select Buy Stock.
  3. Enter how many shares you want to buy.
  4. Decide if you want to use the “All or None” option.
  5. Select the order type—use LIMIT orders.
  6. Enter your limit price.
  7. Select the duration—order ends today or good until you cancel it.
  8. Review your order and execute it.

Buying stocks online is a very easy process as you can see. The time it takes for your order to be filled depends on market conditions.

What is an Interest Rate?

Those in the money lending business have the legal right to charge borrowers an additional fee for their services. For instance, if Jim borrows $100 from Jeff, that money would be considered the 'principal' amount of the loan. Jeff can ask Jim to pay back the principal plus $10, which would be considered an 'interest' payment. By dividing the $10 interest amount by the $100 principal amount, the result is a percentage called the interest rate. In this case, 10 divided by 100 yields an interest rate of 10 percent. The interest rate of a loan is usually calculated as an annual figure, even if the terms of the loan call for a different repayment schedule. Loans for vehicles are often advertised as having a 2.9% Annual Percentage Rate (APR), even if the actual payments are spread out over 5 years. This interest rate indicates that for every $1000 loaned for the price of the car, the lender will receive an additional $29 in interest payments. This amount is added to the borrower's monthly installment payments. An interest rate expressed as an annual percentage can help determine if a particular lender's terms are reasonable. Payday advance lenders, for example, can charge a flat fee for a short-term loan due upon receipt of the borrower's next paycheck. Expressed as a surcharge, this interest payment may not appear excessive; perhaps a $50 interest payment on a $250 emergency loan. But calculated as an annual interest rate, the result is a relatively high 20% APR. Some short-term loans have an annual interest rate of 150% or more if the loan is not repaid in full and the interest accrues daily or monthly. An interest rate can be considered 'flexible' or 'fixed'. A fixed interest rate means that the lender can only charge the same amount of interest per month throughout the life of the loan. Many borrowers prefer to find a lender who offers a fixed interest rate because the repayment terms are predictable and protected by a contract. Because the interest rate in a fixed loan cannot be adjusted, however, many lenders charge more for the loans or don't offer them in the first place. When buying a large ticket item such as a home, a fixed interest rate is almost always preferable to a flexible one. In the case of a flexible interest rate, lenders often tie the loan's interest to the current federal lending rates, also known as the prime lending rate. This is the interest rate charged by the federal government to major banks and other lending institutions. The prime lending rate is regularly adjusted by the Federal Reserve Board chairman, based on economic factors such as inflation or high unemployment. Lenders can legally charge borrowers an interest rate which is a few points above the prime lending rate at the time of the initial loan. If the rate changes, the interest on the loan can also be adjusted. A flexible interest rate can be beneficial when the economy is healthy, but can be more costly if the rates are raised suddenly. Consumers should understand how an interest rate is calculated before applying for store credit cards and other charge accounts. Credit card companies routinely promote a lower introductory interest rate to attract new customers, but the standard interest rate on many cards is 21% or higher.

What is an APR?

An APR or annual percentage rate is a numerical figure used to express the cost of credit. It is the yearly amount a consumer must pay for acquiring a loan or other type of credit. By law, lenders are required to fully disclose the APR to consumers. The law that requires loan-cost disclosure is called the Truth in Lending Act. Originally enacted in 1968, the Truth in Lending Act was instituted as part of the Consumer Protection Act. In 1980, it was reformed and simplified as part of the Depository Institutions Deregulations and Monetary Control Act. The intended function of the APR is to allow consumers to compare loans and determine which loans or other types of credit are the least costly. The APR serves to make it more difficult for lenders to hide fees while advertising low interest rates. Essentially, APRs level the very competitive loan market and help consumers make informed borrowing decisions. While APRs can be used to compare loans and determine the least expensive credit products, they can also be confusing. Each lender may calculate APRs in a different way. Therefore, a loan with a lower APR may not necessarily be less costly than one with a higher APR. Lenders are afforded some flexibility when it comes to calculating APRs. Without breaking the law, they can underestimate the annual percentage rate of a loan by as much as 1/8 of a percentage point. For loans that are considered irregular, lenders may underestimate APRs by as much as 1/4 of a percentage point. To make things even more confusing, various fees are included in an APR. These fees vary, depending on the loan or credit product obtained. Points; prepaid interest; private mortgage insurance; and fees for loan processing, document preparation, and underwriting are commonly included in an APR. Sometimes loan application fees and credit-life insurance costs are included as well. To avoid APR discrepancies when comparing credit costs, some loan experts suggest calculating APRs on your own. This can be accomplished by obtaining good-faith loan cost estimates from lenders offering the same loan programs or credit products at the same interest rates. After compiling this information, subtract all fee amounts that are independent of the loan and add these fees separately. The loan that has the lowest total fee amount is the cheapest loan. However, this method only works when comparing loans that have the same interest rates.

What is a Mortgage?

Let’s assume the day has arrived that you’d like to buy a house. Chances are you don’t have enough cash in the bank to pay for it in full. Instead, like a car, you would probably prefer to put a small amount down, and make monthly payments on the rest. This is the purpose of a mortgage loan. A mortgage loan is procured by a buyer to pay off the seller of a piece of property in full. The buyer then owes the mortgage lender the total amount borrowed, plus interest and fees. As collateral or guarantee of payment, the lender of the mortgage holds the deed or ownership of said property, until the buyer pays the mortgage off. However, the buyer occupies the property as if it were already his or her own. There are several types of mortgage loans available, and which is best for a particular buyer depends on his or her financial situation and long term plans. Some people plan to stay in a house for thirty years; others make short-term investments to move up the real-estate ladder. Matching the right client with the right mortgage loan requires time and energy on the part of buyer and lender both. A few of the common terms associated with mortgage loans are closing fees, points, and the annual percentage rate (APR). These and many other fees can be negotiated. The best-looking mortgage advertisement isn’t always the cheapest due to possible hidden fees. Experts say comparing the APR of a mortgage loan can help the buyer determine which mortgage is less expensive, as law requires that all fees be included in this calculation. Often the APR of a mortgage is not advertised and the buyer must ask for this information. If a buyer can put down 20% of the buying price in cash, mortgage interest rates will be lower and the buyer will not have to get Private Mortgage Insurance (PMI). PMI is required for buyers with little or no equity, as PMI will make mortgage payments in the event the buyer cannot. Lenders require PMI to protect their investment when a buyer puts less than 20% down, because the mortgage, with fees and interest, will initially be greater than the worth of the property. This changes when the loan has been paid down over a period of time, building up approximately 20% equity, at which point PMI (and its fees) terminates. After PMI expires, if the holder of a mortgage misses payments, the lender can foreclose on the loan. This means the buyer has defaulted on his contract to pay the mortgage, and the lender can evict the buyer and sell the property to recoup losses. The buyer loses everything in this scenario. When this occurs, it usually happens early on. Once people build up equity in property they are more motivated to save the investment and have more options. If a mortgage holder who has built up substantial equity is suddenly strapped for cash, he or she might consider refinancing. By refinancing the mortgage over a longer period of time, the monthly payment can decrease. Some people refinance to draw equity out of the home in the form of a cash payment, often used to make improvements on the home. A general rule of thumb is that a mortgage payment should not exceed 28% of the total income of the qualifier(s). Qualifying for a mortgage will require an acceptable debt-to-income ratio. Credit cards, car loans and any other financial debts figure into this calculation. It is a good idea to see how much you qualify for before shopping for a home. Mortgage loans can be fixed-rate or variable, short term or long term. The right mortgage loan will depend on many factors. Be sure to get professional advice, educate yourself thoroughly on your options, and shop around before deciding on the best mortgage plan and lender.

What is the Bond Market?

The bond market is a financial marketplace where it is possible for investors to arrange to purchase and sell various types of debt securities that are in the form of bonds. There are actually a series of different types of bond markets, with each bond market having a particular focus in the type of bonds that are bought and sold. Corporate bonds are one example of a bond market that allows companies to issue bonds to interested investors. The bonds may be issued with a fixed face value that will eventually be repaid with interest, or issued at a rate that is discounted from the face value, but will eventually pay the face value upon reaching maturity. One thriving sector of the bond market is buying and selling bonds that are issued by a government, various government agencies, or a local municipality, such as a city or town. Often, these types of bonds are introduced on the bond market as a means of raising funds to underwrite a specific project. These types of bonds will usually be short term in nature, especially if the project is anticipated to begin generating revenue immediately upon completion. Collateralized debt obligation, with mortgage or asset backing, is another example of a bond market. Providing the opportunity to make use of existing assets to guarantee the repayment of the bond in the event of a financial reverse, these guaranteed bonds are considered among the safest bonds on the market today. While the return may be somewhat modest, the investor who wishes to engage in investments with little risk will often find these types of bonds to be ideal. Selling and buying bonds is an activity that can be pursued by individual investors, corporations, and governments. Brokerage houses often can provide excellent detail on the current state of the bond market, including information on different types of bonds that are currently available. Brokers can also search through the bond market and find details on the type of return that can be anticipated from the investment, and the range of maturity dates that are carried by each of the bonds. The bond market provides a wide range of options for over-the-counter transactions, with short term and long term investments available. The general operation of the bond market is usually configured in accord with the laws governing financial transactions in the country of origin, such as those provided by the Securities and Exchange Commission in the United States.

What is the Stock Market?

A stock market is a place where buyers and sellers trade company stock for a set price. In the financial world, “stock” simply means a supply of money a company has raised from individuals or other organizations. If you buy stock, then you own a part of a company. This part is called a “share.” People who own stock are referred to as "shareholders" or "stockholders." Shareholders hope the companies they invest in go on to earn money, because they will then receive a share of the profits. If the company they buy stock in loses money, however, then the stockholders won't even regain the money they invested. Shareholders usually have voting rights, typically one vote for every share they own. Many companies have yearly meetings where the shareholders can vote on company issues. Stockholders also receive annual or quarterly reports that let them know how the company is doing financially. When a corporation wants to sell shares of its company, it lists its stock on an exchange. The New York Stock Exchange (NYSE) and the National Association of Securities Dealers (NASDAQ) are commonly used stock exchanges in the United States. These exchanges are set up to make it faster and easier for people to buy and sell company stock. When individuals want to buy or sell stocks, they can simply call a stock broker, which is a firm authorized to trade at stock exchanges. The stock broker relays the trade message to the floor of the correct exchange, and a representative of the company then completes the trade request. A stock broker receives a commission for providing this trading service. However, it is becoming increasingly popular for people to use online trading sites instead of stock brokers. If an individual believes the stock market is going to go down, he or she is referred to as “bearish.” These bearish investors buy stock very cautiously. People are called “bullish” when they believe the stock market will go up. Bullish investors tend to put more money into the stock market. Likewise, if the prices of stocks as a group tend to rise, the stock market is called a "bull market." If stock prices as a group tend to fall, however, the stock market is referred to as a "bear market." The first public stock market is reported to be the Amsterdam Stock Exchange. This Dutch exchange was founded in the early 17th century and started the trend of buying and selling shares of company stock. There are now stock markets in a majority of developed countries. The largest stock markets are in the United States, the United Kingdom, Canada, Germany, China and Japan

What is Market Price?

In finance, the term market price, or market value, refers to the most recent price at which a security transaction took place, if it was completed on an exchange. If the transaction took place over-the-counter, with brokers and dealers negotiating directly with each other, market price refers to the most current bid, the price requested by the broker, and the most current ask, the price demanded by the dealer. As an economic concept, market price is the price at which a good or service is offered at in the marketplace. This price is reached when market supply and market demand meet. Alfred Marshall, an influential English economist, developed the supply and demand model to explain how human behavior determined market price. Supply is the service or good that producers are willing to provide at a given price. Demand is the value of a service or good that purchasers are willing to buy at a given price. There is an inverse relationship between price and supply, and a direct relationship between price and demand. On a typical supply and demand graph, the X-axis shows quantity and the Y-axis shows price. The supply curve slopes upward while the demand curve slopes downwards. The point of intersection between the two curves is the market price, also known as the equilibrium point. Various factors can shift the supply or demand curve significantly affecting the equilibrium price. For example, change in weather can affect the supply of certain goods while the change in consumer preference can greatly change demand. This supply and demand theory regarding market price, while popular, has been criticized as being too simplistic. It can be argued that a good or service may already have a price before reaching the marketplace. Moreover, buyers are not always considered by producers when creating a commodity. Another contradiction to Marshall’s theory comes from Keynesian economics, named after the renowned economist John Keynes. He noted that prices could become “sticky” by not responding to fluctuations in neither demand nor supply. This is especially likely to occur when prices are decreasing. A noted example of such as situation is the Boston housing market in the 1990s. Buyers and sellers could not agree on a market price as the market dried. Other deterrents to the natural laws of supply and demand are monopoly and oligopoly. The sole or a limited number of providers of a certain commodity has the power to dictate the market price. Similarly, in a monopsony, situations where there are many sellers and one buyer, the buyer is able to dictate the price.

What is a Market Order?

A market order is an order to buy or sell a stock at the current market price. A broker enters an order as a market order when requested to do so by his or her client. When a market order is placed, it is almost guaranteed that the order will be executed. Ultimately, however, this depends on whether or not there is a willing buyer or seller. A market order is usually less expensive than a limit order. A limit order is an order to buy a security at a price no greater than what has been specified by the owner. This gives the customer control over the price of the trade. A buy limit order can only be executed by the broker. It also has to meet or fall short of the limit price. One disadvantage of a market order is that the price is paid when the order is executed. The price may not always be the same as that presented by a real-time quote service. This often happens when the market is changing very quickly. Placing an order "at the market," especially when it involves a large number of shares, offers a greater chance of getting different prices for different parts of the whole order. There are a number of different markets in which orders can be placed, such as the stock market, bond market, and commodities market. A market order is an instruction from a customer to a broker. There are always hundreds of brokers “on the floor” of the stock exchange looking to buy and sell. Therefore, a broker must be able to process market orders quickly and efficiently. The instructions for a market order can be simple or complicated. The broker must execute it immediately. With willing sellers and buyers, therefore, a market order can sometimes be filled in a matter of minutes. A market order is the easiest type of order for a broker to complete. It is important to note that once a market order is placed, however, the customer has no control over the price of the transaction. The broker is tasked with finding the best price available at that moment. A market order can be placed from anywhere in the world. The broker, however, is the only person who needs to be on the floor in order to complete the transaction. Therefore, an investor who wishes to invest, buy, or sell shares must call his or her broker and allow the broker to care of the rest.

What is a Brokerage?

A brokerage is a firm that acts as an intermediary between a purchaser and a seller. More commonly, a brokerage is referred to as a brokerage firm. To broker a deal is to communicate with both the buyer and seller as to acceptable price on anything sold or purchased. A broker, a single person, or the brokerage firm completes any necessary legal paperwork, obtains the appropriate signatures, and collects money from the purchaser to give to the seller. Since the buyer and seller are employing the brokerage to complete the deal, the brokerage may collect a portion of the money obtained. In some cases, a brokerage receives money from both parties. In others, the brokerage receives a commission only from the seller. Brokerage firms are most commonly thought of in relationship to the sale and purchase of stock shares. Fees are variable, depending on the degree to which the brokerage is involved in decisions about purchase. Some stockowners give their brokers power of attorney to make decisions about when to buy or sell stock and depend upon their brokers for researching new stock for purchase. This type of brokerage firm usually assesses a fairly large fee, and regardless of whether the owner loses or earns money, the firm is paid. Other brokerage firms are employed by people who like to do their own research and make all their own decisions about what and when to buy and sell. These firms have a tendency to charge per transaction and can be quite reasonable to employ. In the past few years, several brokerage firms have begun stock trading on the Internet, allowing their clients access to information that will help them carefully research their decisions. These companies are not a sound economical choice for clients who do not do adequate research or cannot consistently read up on their stocks. Extensive involvement by the stockowner is necessary to hopefully make the best deals. In other areas of business, brokerage firms may be employed to acquire and sell real estate. Brokerages exist to acquire art or antiquities. Also, restaurants and other service companies may use brokerage firms to obtain meat and produce, restaurant supplies, or furniture. Sometimes, employing a broker in this last sense is not initially expensive to the purchaser, because the broker receives a fee from the companies used by their clients. However, the price of merchandise obtained through a broker generally has a mark-up that makes up for this lack of commission. Brokerage firms can be helpful because they save their clients, whether buying or selling, time. Not everyone has time to look at 40 real estate properties before purchasing. Not every restaurant manager wants to interview a slew of potential food supply companies before selecting one. For those who are cost conscious, however, employing a brokerage firm may mean added expense. Buyers and sellers who come to an arrangement between each other “cut out the middle man,” and are thus able to save money. On the other hand, employing a reputable brokerage firm generally means that the firm assumes liability for the seller’s claims. Should any portion of a sale be conducted illegally, the brokerage firm must often compensate the purchaser and take legal action against the seller.

How do I Buy Stocks Online?

There are many decisions to be made by those who want wish to buy stocks online. The two largest decisions are which broker to choose and which stocks to purchase. As with any investment, research should be taken very seriously. The first thing to do is to decide on an online broker. There are a number of websites that offer this service, ranging from those with very low prices and minimal services, to high-priced full service brokers. Full service brokers will usually have offices where customers can consult in person as well as customer service agents available by telephone to give financial advice. Lower-priced brokerage firms usually have online tools to help their customers choose the best stocks. These can be helpful, but don't allow for the personalized advice that some desire for their portfolio. Many online brokers have low end limits of deposits. These range from $500 to $2,000 US Dollars (USD). For those with smaller budgets who would like to buy stocks online, there are a few low service services with no deposit minimums. Some brokers allow users to trade only particular types of investments. Many low service brokers only allow trading of traditional United States stocks. Others allow users to trade internationally as well as invest in mutual funds and bonds. Once a brokerage firm is decided upon and an account is setup with a deposit and the appropriate tax forms, the new user can start to buy stocks online. Research is key to making good choices on what stocks to invest in. Investors need to learn as much about a particular stock as possible before committing to purchase it. Stocks can be researched online with several independent companies and on major search engines. These sites usually give ratings for particular stocks and recommendations to buy or sell based on their recent and long term performance history. Brokers allow various ways to buy stocks online. Investors can make a one-time order or use a plan. For a one-time order, the investor tells the broker how many shares he wishes to buy. A limit order is a good idea because it tells both how many shares an investor wants to buy and the price they are willing to pay. Unlike a market order, it prevents the investor from spending more than budgeted. Plans are regular investments in a given portfolio. Many online brokers have a monthly fee for this service that includes the cost of weekly trades. Investors choose the amount of money they wish to deposit every week and which investments they want it to go into. Full-service brokers can help to design this investment plan, while low service brokers have online tools to help users decide how much and where to invest to meet their overall goals. As with any investment, those who buy stocks online should stay appraised of the portfolio's performance. If things are not moving the way desired, investment plans can be altered. Particularly when using a low service broker, it is important to check stocks regularly as they will not provide the alerts that a full service broker may. Investing online is a simple process that has a whole set of complications with it. It is a serious process and should not be taken lightly. Investors need to remain informed and alert throughout.