Apple Podcasts | Spotify | Google Play Store | Stitcher
The Investing 101 Series is BACK!! I received a call from Shannon wanting to know how to buy her first shares of stock. I asked Tela Holcomb, a stocks and options trader, to join me to give a beginner’s guide to buying stocks.
This episode is part of the Investing 101 Series.
A Beginner’s Guide to Buying Stocks
Investing your money can be a scary, especially if you don’t know where to start. If you have never purchased a share of stock, or any other investment product, this quick guide is for you. To get started, your first step is going to be to open a brokerage account.
What is a Brokerage Account?
Think of a brokerage account as the bank account for your investments. You can deposit cash into your brokerage account and use that money to purchase shares of stock and other investment products. The shares of stock that you purchase will also be held within this account.
Where Can I Open a Brokerage Account?
When it comes to finding the right brokerage account, it’s all about fit. Shopping around is highly encouraged. You should search around and compare accounts just like you would when looking for the right checking account.
I found a great list of stock brokers in an article titled Best Online Stock Brokers for Beginners 2018 by Dayana Yochim with NerdWallet.com. Dayana mentions ETrade, Charles Schwab and Fidelity to name a few. These are just suggestions. Remember to always choose what’s best for you and your needs.
Online Apps for Buying Stocks
If you are looking for the ability to easily buy and sell stocks directly from your phone, then Tela recommends checking out Stockpile. What makes this app unique is the ability to buy fractional shares of stock.
This means that no matter how expensive the stock is you can buy as little as $1 at a time. This allows you to purchase stocks such as Google and Amazon even if you don’t have enough to buy a full share. Do note that there is a $0.99 per trade fee.
Another app that we mentioned in this episode is Robinhood. This app doesn’t allow you to buy fractional shares like Stockpile, but it does allow you to buy and sell stocks for free. Robinhood makes its money by lending out the cash that users leave in their accounts, similarly to how banks make money.
They do also charge for additional services such as allowing users to buy on margin (Buying on margin is essentially buying stocks with a loan issued by the broker – not recommended for beginners).
Identify Your Investing Goals
Tela advises individuals that are new to investing to identify their goals before making any decisions. Are you looking to hold on to the stock for a few days or a few years? Will the stock you buy be a part of your retirement plan? Do you want help from a professional?
How you answer these questions will help you better understand your needs and this information will in turn help you find the brokerage account that is the best fit for you.
Remember, Investing Does Come with Risks
Although investing in stocks is very enticing due to the potential for large gains, the opportunity to lose money is just as high. Since this is a beginner’s guide to buying stocks I wand to make it clear that there is real risk involved. Stocks by nature can gain and lose value quickly, so please take the time to do your homework and really understand what you are putting your money in to before making a purchase or sale.
Meet Today’s Guest – Tela Holcomb
Tela is a stocks and options trader, investor and serial entrepreneur. She is on a mission to teach other women how to trade the stock market so they can break free of their 9 to 5, create a monthly income and build a financial legacy.
Tela does this through her various online training courses including her free 7 Day foundations course which you can find using the link below.
Find out more about Tela on her blog TelaHolcomb.com or on any of the social media platforms below.
Facebook: facebook.com/telaholcomb
Instagram: instagram.com/telaholcomb
YouTube: telaholcomb.com/youtube
Connect with me
