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How to buy shares and how to start stock investing

You've probably imagined many times how you're going to buy shares in a company and make enough money to travel the world and last you for the rest of your life. Achieving this is not easy, but you have to start somewhere. You don’t need huge amounts of money to start your investing journey, some people start with a few dollars: $100 or less. And the good news is you that can do all of this completely online, from the comfort of your own home, all you'll need is a brokerage account.

In this article, we will explain jargon-free, in plain English, how to buy shares in a company. Let's take a look at the six steps for how to buy stocks online!

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How to buy shares and how to start stock investing
The six-step plan to buying shares and to starting stock investing

Buying shares online is not rocket science. Follow this simple six-step plan:

  1. Find a good online broker
  2. Open a brokerage account
  3. Upload money to your brokerage account
  4. Find a stock you want to buy
  5. Buy stocks
  6. Review your share positions regularly
How to buy shares - The six step plan of how to buy shares online

Step 1: Find a good online broker

First of all, you need to find a good online broker. BrokerChooser will help you here: get a free recommendation by answering just a few questions, or read further to get a general broker recommendation.

When recommending a broker, we take into account the broker’s fees, stock prices, trading platform, accessible markets to trade, and how easy it is to open an account. Safety is also very important, but since we recommend only safe brokers, you don't have to worry about this.

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Step 2: Open a brokerage account

After finding your online broker, you need to open an investment account to begin trading. This can usually be done online. The investment account is basically what you need to start buying stocks online. Think of it as a bank account where in addition to holding cash, you can also hold shares. Opening an online brokerage account usually takes a couple of days, although at some brokers you can get it done within a day.

Step 3: Upload money to your brokerage account

In order to buy and sell shares online, you need to have money on your investment account.

Minimum deposits can be as low as $20. At some brokers, you can buy fractional shares, so if for example one Amazon share is priced over $2000 and you only want to invest $500, you can still do it.

Usually, you can choose between a bank transfer (ACH) or depositing funds via credit/debit card. At some brokers, you can fund your investment account even via Paypal, e.g. at eToro.

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Step 4: Find a stock you want to buy

You can get inspiration from others' ideas or you can do your own research. For example you could choose to buy into some stocks that Warren Buffett owns. On the other hand, if you put some time and energy into your own stock research, you can learn a lot more from it. Investment ideas can come from your broker in the form of stock reports and analyses, but you can also use independent research. The financial news and investment courses can also be useful in learning how to pick a winning stock and the suitable stock market.

You may consider using a stock screener. WallStreetZen, for example, doesn't only just show financial data but helps users interpret the data and understand the context.

Step 5: Buy stocks

You have the account, the cash, and the stock you want to buy. Now all you need to do is press the 'Buy' button. You log in to your online trading platform, find the stock you have selected, enter the number of shares you wish to buy, and click 'Buy,' which will initiate the purchase of shares. Alternatively, you can also just select how much you’d like to spend on the given stock.

When placing an order, you can choose from different order types, e.g. market order, stop order or stop limit order. A market order buys immediately at the current market price, while a limit order allows you to specify the exact price at which you want to buy the shares. Find more details on order types here.

Step 6: Review your share positions regularly

You're done, you've bought the shares, they are yours. Now it is key to monitor your investments.

If you bought the shares with the goal of holding for a longer term, you don’t need to check the price movements every day but you might want to check the quarterly or yearly reports and company guidance. This basically means reviewing your investment strategy from time to time.

For short-term buyers, position management could mean setting up a stop-loss price of where to cut losses, and the target price of where you want to sell stocks, while making a profit.

Now that you have mastered the 6 steps of buying shares, take a moment to look at the top 5 brokers we have selected for you.

How to buy shares and how to start stock investing
Best 5 brokers for buying shares online

As we live in the internet era, trading nowadays takes place on online platforms. Trading floors have turned into well-designed tech platforms with interactive tools and charts.

If you're just starting to explore how or where to buy shares online, we recommend that you pick one of the following five brokers:

  1. Interactive Brokers, International broker providing all asset classes
  2. Fidelity, US stockbroker
  3. Zacks Trade, US discount broker
  4. eToro, Global social trading broker
  5. TD Ameritrade, US-based stockbroker

What makes these brokers a good place to buy shares? The most important selection criteria were the availability of easy-to-use web and mobile trading platforms and fair fees. Other factors we considered were the availability of great educational tools, an easy account opening process, and multiple options for deposit/withdrawal.

Below is a table comparing the quality of the most important factors, i.e. web/mobile platforms and fees for each broker:

How to buy shares in a company - the best brokers
Interactive Brokers Fidelity Zacks Trade eToro TD Ameritrade
Web platform score 4.0 stars 4.5 stars 4.0 stars 4.4 stars 4.3 stars
Mobile platform score 3.5 stars 4.5 stars 3.5 stars 4.7 stars 4.8 stars
Stock and ETF fee scores 4.8 stars 4.7 stars 4.5 stars 5.0 stars 5.0 stars

Now let's check in detail the fees charged by the best brokers for buying shares online:

How to buy shares online - broker stock fees
Interactive Brokers Fidelity Zacks Trade eToro TD Ameritrade
US stock $1.0 $0.0 $1.0 $0.0 $0.0
UK stock $4.2 $12.6 $16.8 $0.0 -
German stock $3.6 $22.8 $14.4 $0.0 -
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All spreads, commissions and financing rates are for opening a position, holding for a week, and closing.

Not sure which broker? For a tailored recommendation, check out our broker finder tool. You can enter your country and it will show only those brokers that are available to you. Want more details? Compare brokers with the help of this detailed comparison table.

Now, let's see some more details about the best brokers for buying stocks.

Interactive Brokers Logo

#1 Best broker for buying a share
Interactive Brokers

4.9

Interactive Brokers, one of the biggest US-based discount brokers, was founded in 1977. The broker is regulated by several financial authorities globally, including top-tier ones like the UK's Financial Conduct Authority (FCA) and the US Securities and Exchange Commission (SEC).

Given that the broker has licenses from multiple top-tier regulators, Interactive Brokers is considered safe. The fact that it has a long track record and publicly disclosed financials while being listed on a stock exchange all point to IB being a safe service provider.

Interactive Brokers recently launched a new app for global stock trading: read our review of IBKR GlobalTrader.

In addition, Interactive Brokers also has an app you can use for ESG investing: read our review of IMPACT by Interactive Brokers.

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Fidelity Logo

#2 Best broker for buying a share
Fidelity

4.7

Fidelity is a US stockbroker founded in 1946. It is regulated by top-tier authorities like the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

Fidelity is considered safe because it has a long track record and is regulated by top-tier financial authorities.

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Zacks Trade Logo

#3 Best broker for buying a share
Zacks Trade

4.4

Zacks Trade is a US-based discount broker and a division of LBMZ Securities. LBMZ Securities was founded in 1978 and is regulated by the top-tier US financial authorities SEC and FINRA.

LBMZ Securities's clearing and execution services are provided through Interactive Brokers, a global stockbroker regulated by many top-tier financial authorities globally.

If you're familiar with the services of Interactive Brokers, you might notice that many of Zacks Trade's services are the same. To sum up:

  • Zacks Trade has its own, different fee structure, product selection, educational tools and customer support. Unlike at Interactive Brokers, trading forex, CFDs and futures is not supported.
  • The account opening and deposit/withdrawal processes, trading platforms and research tools are the same as at Interactive Brokers.

Zacks Trade is considered safe because it has a long track record and is overseen by top-tier regulators.

Since Zacks is more expensive than IB, why would anyone favor Zacks over Interactive Brokers? We found two possible reasons:

  • Zacks falls under SEC regulation and users have SIPC protection, no matter where they live
  • Zacks provides free broker-assisted trading

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eToro Logo

#4 Best broker for buying a share
eToro

4.7

eToro is a well-known Israeli fintech company and a social trading broker, established in 2007.

Check out our eToro review tailored to the needs of beginner investors and traders.

eToro serves UK clients through a unit regulated by the Financial Conduct Authority (FCA) and Australians through an Australian Securities and Investment Commission (ASIC)-regulated entity. All other customers are served by a Cypriot unit that is regulated by the Cyprus Securities and Exchange Commission (CySEC).

eToro is not listed on any stock exchange, does not disclose its annual report on its website and does not have a bank parent.

Being regulated by the top-tier FCA and ASIC is a good sign for eToro's safety.

HEADS UP: Minimum deposit based on residency and account activation – Be sure to check the minimum deposit that is required to activate your account. After uploading your documents, a deposit is also needed in order to make trades. The amount of the deposit required is based on your residency, and ranges from $10 to $10,000. More details are available in the review’s Account opening section.

Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

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TD Ameritrade Logo

#5 Best broker for buying a share
TD Ameritrade

4.7

If you are an experienced trader looking for solid research and a well-equipped desktop trading platform, we definitely recommend TD Ameritrade.

Founded in 1975, TD is one of the biggest US-based stockbrokers and is regulated by top-tier authorities like the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA) and the Commodity Futures Trading Commission (CFTC).

This online broker is considered safe as it has a long track record, is listed on a stock exchange, has a banking background, discloses its financials and is overseen by top-tier regulators.

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How to buy shares and how to start stock investing
What does buying shares in a company really mean?

When you buy shares in a company you become a shareholder, i.e. an owner of that company in a very small percentage.

For example, Tesla has 185 million shares to buy (outstanding). When you buy 100 Tesla company shares, you will be one of the owners of Tesla. Your ownership percentage will be very tiny, 0.000055% (100/185 million), but still, you will be an owner with all the rights that come with this ownership:

  • The right to receive dividends - when the company allocates dividends, you will receive a part of this. Staying with the previous Tesla example, let’s assume that in 2020 Tesla will pay $100 million in dividends, then you will receive $55 (0.000055%*100 million).
  • The right of voting - if you are a shareholder of a company, you have the right to participate at the company's annual meeting. At the annual meeting, you will have the right to vote on the topics that will fundamentally influence the future of the company. These topics can vary from the election of the board of directors to the amount of the dividends allocated.

Speaking about financial literacy: when you read about buying shares online, you may find that both the expressions stock and share are used. What is the difference between them? The word stock is the general term for company ownership. For example “I invest in American tech stocks like Apple and Facebook”. Share usually refers to the ownership stake in a company. For example “Yesterday I bought 100 Tesla shares.”

How to buy shares and how to start stock investing
Manage the risk of buying shares

Investments always come with some risks that you should aim to manage. Below, you can find the most common ones and our advice on how to mitigate them.

Avoid the scams

Risk: Unfortunately, tons of scam “brokers” are out there on the market trying to steal your money. When you see ads for binary options trading or automated investment algorithms that generate outstanding returns, start to get suspicious. In these cases, the best thing to do is to ignore these ads.

How to manage it: When buying shares online, go with our broker selection. We have an active account with the brokers we selected and we test them regularly.

Diversify your portfolio

Risk: If you put all of your savings in just one or two stocks, and the company you selected goes bust, you could lose all your invested money. A similar risk is when the majority of your stock holdings are in the same industry.

How to manage it: Diversify your investment portfolio. This practically means buying many different shares and not putting all your eggs in one basket.

Avoid crappy stocks

Risk: when buying individual stocks, there is always a risk of selecting the wrong ones. Here, 'wrong' could mean anything from a company that defaults to just buying an overpriced share.

How to manage:

Learn: This is the tricky part, since you need some knowledge and experience. The best is to start learning by reading books on investment and taking online courses. There are tons of great books out there, but you can start with the Intelligent Investor by Benjamin Graham. This is also the book on investment most recommended by Warren Buffet.

Gather information: While you are learning, start collecting as much information about your target companies as possible. Read the company presentations and quarterly reports on their website (usually found in the IR -Investor Relations- section), understand their business profiles, start playing around with their income statements, gain some knowledge about their management background or even attend their annual meetings. These will help you gain a better understanding of the company and the specific industry.

Compare multiples: When it comes to pricing, use industry multiples as a proxy for your target stock. P/E is a basic multiple, but each sector has its own favorite.

How to buy shares online- investment ideas for purchase shares of stock

How to buy shares and how to start stock investing
Your investment account can be protected

Since you are trading with your savings, it is very important to pay attention to safety. The brokerage services we selected have some of the best protection schemes, the level of which depends on the regulatory body of the broker (learn more about investor protection).

How to buy shares - Safety of brokers
Interactive Brokers Fidelity Zacks Trade eToro TD Ameritrade
Investor protection amount £85,000 or $500,000 (but only $250,000 for cash) in the UK depending on the assets you hold; $500,000 ($250,000) in the US; €20,000 (IB Ireland & Luxembourg) or €100,000 (IB Central Europe) in the EU, CAD 1 million in Canada; HKD 500,000 in Hong Kong $500,000 (securities up to $500,000, cash up to $250,000) $500,000 ($250,000 cash limit) plus $30 million (with a cash sub-limit of $900,000) subject to an aggregate limit of $150 million. £85,000 for UK residents, €20,000 for non-UK residents $500,000 (securities up to $500,000, cash up to $250,000)
Country of regulation USA, Ireland, UK, Hungary, India, Australia, Canada, Japan, Hong Kong, Singapore USA USA UK, Cyprus, Australia USA, Hong Kong, Singapore

You can compare the protection amount among all reviewed brokers.

Compare protection amounts

Tip: Use national tax free accounts

In your country of residence, you may have the option to open special investment accounts that offer favorable tax conditions. For example, in the UK, this account is the ISA, the Individual Saving Account, which is exempt from income tax and capital gains tax on the investment returns. In the US, individual retirement accounts (IRA) offer many benefits.

How to buy shares and how to start stock investing
Bottom line

"How to buy a company's stock? How to invest in shares? Where to buy shares?" - Were these things you were asking until now?

Just follow these six easy steps to buy shares online:

  1. find a broker
  2. open an account
  3. fund the account
  4. find the stock
  5. buy the shares
  6. review your position

It may look tricky at first, but all you need to do is go step by step. See you at the next Coca-Cola or Berkshire annual meeting!

If you're still in doubt about which broker to choose, we compiled a brief summary to help:

How to buy shares - The best brokers
Interactive Brokers Fidelity Zacks Trade eToro TD Ameritrade
Web platform score 4.0 stars 4.5 stars 4.0 stars 4.4 stars 4.3 stars
Mobile platform score 3.5 stars 4.5 stars 3.5 stars 4.7 stars 4.8 stars
Stock and ETF fee scores 4.8 stars 4.7 stars 4.5 stars 5.0 stars 5.0 stars
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Author of this article

Ádám Nasli

Author of this article

Ádám worked in banking and investment, and holds a professional degree in this field. He is a motivated finance expert, having joined BrokerChooser in 2018. He's also eager to help people find the best investment provider for them, and to make the investment sector as transparent as possible. In his spare time, he loves learning new things, especially data science, algo-trading, programming and trading.

Ádám Nasli

Analyst head

Ádám worked in banking and investment, and holds a professional degree in this field. He is a motivated finance expert, having joined BrokerChooser in 2018. He's also eager to help people find the best investment provider for them, and to make the investment sector as transparent as possible. In his spare time, he loves learning new things, especially data science, algo-trading, programming and trading.

Everything you find on BrokerChooser is based on reliable data and unbiased information. We combine our 10+ years finance experience with readers feedback. Read more about our methodology

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