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.