Andrew Goldman has been writing for over 20 years and investing for the past 10 years. He currently writes about personal finance and investing for Wealthsimple. Andrew's past work has been published in The New York Times Magazine, Bloomberg Businessweek, New York Magazine and Wired. Television appearances include NBC's Today show as well as Fox News. Andrew holds a Bachelor of Arts (English) from the University of Texas. He and his wife Robin live in Westport, Connecticut with their two boys and a Bedlington terrier. In his spare time, he hosts “The Originals" podcast.
If you want to own a small piece of a public company like Tesla, Apple or Air Canada— aka a "stock" the process is surprisingly simple. All you need is a stock trading app, money to purchase the stock, and an idea of what you want to buy. We can't help with the money part, but we've got everything else covered. Here's how to start buying stocks.
1. Select an online stockbroker
The easiest and cheapest way is to open an account with an online stockbroker. You'll be able to pick the stocks you want to buy yourself. If you don't want to pick stocks yourself, try automated investing. These services pick investments for you and offer a reasonably priced, user-friendly way to invest as little as a dollar.
The sign-up process for online investment platforms generally takes a matter of minutes. You'll just need your home address and a phone number a social insurance number to get started.Get started with Wealthsimple Trade. Sign up today and start building your portfolio.
2. Research the stocks you want to buy
Next, it's time to research and pick your stocks. According to Warren Buffett, the Oracle of Omaha, if you're going to get into professional stock picking.
"Buy into a company because you want to own it, not because you want the stock to go up."
If you think you're the next Buffet and want to invest in specific companies you value, use an online investment platform.
That said, stock-picking is a high-risk strategy, and Buffett points out that stock picking is not an investment strategy for the faint-hearted:
"The goal of the non-professional should not be to pick winners... but should rather be to own a cross-section of businesses that in aggregate are bound to do well."
If stock-picking sounds just as fun as pulling teeth—fret not. You can invest in the entire stock market by buying "index funds" with the same online investment platforms. You can also use an automated investing service. Most of these services buy a bunch of funds that track the market, which historically has grown, on average, by about 7-10% per year. That said, investing in stocks has its risks. Stocks are volatile little things whose value can rise and fall suddenly.
3. Decide how much you want to invest
When deciding how many stocks to buy, it's wise to set a budget. You probably don't want to invest money you'll need tomorrow to keep the lights on and the cat fed.
Keep in mind that different stocks cost different amounts of money. A single share of a company like Air Canada costs under $25, but Amazon and Alphabet come in at over $1,000 a share. Automated investing can be particularly useful if you have a small investment budget since you can start with $1.
Finally, don't forget to budget for fees. Most stockbrokers charge a fee for every single trade you make. Investment fees are like termites; they'll chew right through your investment money, so it's wise to choose a commission-free trading platform like Wealthsimple Trade.Get started with Wealthsimple Trade. Sign up today and start building your portfolio.
4. Choose your stock order type
You've chosen an online investment platform and how many shares you want. Now it's time to proceed to checkout. Before you hit that "buy" button, you'll need to select an "order" type. The most common is a market order, a request to buy or sell a stock at the market price. Some traders might choose to buy a stock only when it hits a specific price known as a limit order.
Buying stocks is that simple. And if all this talk of stock buying has made you keen to get started, purchase stock commission-free with Wealthsimple Trade or invest in an automated portfolio with Wealthsimple Invest.
If all this talk of stocks has made you want to buy some of your own—sign up to Wealthsimple Trade. Wealthsimple Trade lets you buy and sell thousands of stocks on major Canadian and U.S. exchanges. Millions of Wealthsimple clients trust us with over $8.4 billion—start investing now.
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