Learning how to buy a share of stock isn’t nearly as complicated as it once was. Gone are the days of calling your stock broker and dumping piles of money into an account that you couldn’t really access without them. In today’s digital world, there are a myriad of ways you can buy stocks. Even though brokers are still a viable and potentially valuable option, many people choose to take the entire process of buying stock into their own hands.
Today we are sharing recommendations on how to buy a share of stock for those who are considering the process but haven’t jumped into it yet.
Understanding the nuances of different methods to buy a share of stock
Buying stocks online: Many investors who buy stocks on their own do so online. There are certainly pros and cons of doing so. First, let’s consider the pros. Buying stocks online is typically cheaper than using a stock broker, especially a full-service broker. There are also discount brokers available that charge lower rates.
However, working with a discount broker can be costly because discount brokers don’t have to abide by fiduciary responsibilities. Ultimately this means that these brokers don’t have to put your needs above their own. They don’t have to consider your risk tolerance or your financial goals. They simply make the stock buys or sells that you ask for. Somewhat similarly, buying and selling stocks online can make the process too easy, which can lead investors to make purchases or sales that they regret and wouldn’t have made with adequate consideration.
Automated stock trading systems: There are automated stock trading systems for those investors who still want to buy stocks online but want some assistance. These systems allow investors to set specific parameters for both buying and selling stocks. When those parameters are met, the system automatically executes the buy or sell.
Some investors like these systems because it takes the emotion out of investing and allows for entries or exits based purely on the numbers. It can also stop someone from buying or selling stocks online too much, which is one downfall of online trading. This level of discipline can be a helpful tool in someone’s investing arsenal. The cons to automated trading systems are that they can perform poorly. They are also worth avoiding for those who are not technologically savvy, as technical malfunctions are possible, and it’s important to regularly monitor the performance of the software.
Working with a broker: A full-service broker would be the most expensive option for those who want to learn how to buy a share of stock. The best brokers will put an investor’s needs and goals above their own. These brokers seek to provide a cost-effective way of managing investments.
Unfortunately, there are also full-service brokers worth avoiding. These individuals may provide you with a service that meets the requirements of the law, but there are still ways for them to benefit themselves while still appearing to make decisions that will benefit you.
The best suggestion for those who want to work with a full-service broker is to find someone you trust. You may want to ask your friends, family, or co-workers for suggestions. You can also double-check the reputation of potential brokers online. It’s essential to find a full-service broker that you trust and feel will make the best decisions for your financial well-being.
What is your plan for how to buy a share of stock? Will you go at it alone online, or do you prefer to hire someone to help you?