After the miserable years the U.S. stock market had between 2000 and 2010, many investors think it might be time for a turnaround. Although experts contend that you never know the perfect time to buy, purchasing shares of U.S. stocks isn’t as easy as it may seem. There is much to learn, as you'll have to decide which brokerage account to open, which stocks to buy and then complete the trade to purchase your shares. Luckily, all these tasks fall into a few basic areas you’ll need to study before pressing the “buy” button or calling your broker to purchase U.S. company shares.
Write your goals in actionable, concrete terms. The National Endowment for Financial Education recommends that you start any investment plan by making a list of goals that have a set time table to reach and are reasonable to obtain. By completing this exercise, you’ll narrow the list of thousands of U.S. companies in which you can invest down to a more manageable number that may suit your financial goals.
Place enough money in a brokerage account to purchase U.S. stocks and cover your trading costs. People who don’t want to trade alone or are uncomfortable making stock-picking decisions without professional help may be well served using a full-service brokerage company. You’ll have access to investment professionals who are licensed to help you buy suitable U.S. stocks for your goals. Ask your friends for recommendations of good brokers they may know. Check the track record and background of any prospective financial advisor by using the Financial Industry Regulatory Authority (FINRA) BrokerCheck website (see Resources).
Place money instead in an online or discount brokerage account if you’re comfortable completing research, making trades and tracking your U.S. stock portfolio alone. By choosing a discount broker, you won’t receive the help of a professional, but you’ll save some money on trading costs. Find and compare a few different online or discount broker fees, trading tools, and services before deciding to open an account.
List U.S. companies you enjoy or admire, or whose products you use, to begin your research tasks. Long-time investment pro Peter Lynch recommends buying shares in companies you know because you’re more likely to understand why they’re profitable and the possible stumbling blocks that may stand in their way in the future. Use research tools online through websites such as Etrade Clearstation, Yahoo! Finance and MarketWatch Bigcharts to scan company revenue and profits, find news about management changes and product offerings, and track charts displaying historical share price trends.
Purchase U.S. companies by executing buy trade orders. You’ll want to decide between market and limit orders to buy your shares. Market orders trade immediately at the best available price. You’ll want a limit order when you’re worried you may overpay for a stock. Limit orders are placed at a price below the market, in the hopes that the price will descend, triggering your trade.
- How Does a Put Option Work?
- The Advantages of the Small Investor
- How do I Buy Shares on the Stock Exchange?
- What Happens if I Have a Short Position in Shares That Do a Forward Split?
- Ways to Play a Bear Market
- What Happens to a Shareholder When Delisting Occurs?
- How to Distinguish Between the Intrinsic Value & the Fair Value of an Option
- How to Buy Shares of Dividend-Paying Companies Without Paying Broker Fees
- Bull Put Spread Vs. Bull Call Spread
- How Does Stock Conversion Work?