How-To Invest First Step
Investing in stocks is one of those things that sounds much more complicated than it is, especially if you have never done it before. Fortunately, the most complicated part of how to invest in stocks, bonds & funds is opening the right account. Once you have that step behind you, the rest is relatively easy.
While there are several alternative programs and account types such as Sharebuilder and investing with DRIPs, the easiest way to invest in stocks without the kinds of limitations that might trip up many investors later is with a brokerage account. There are literally thousands of financial companies that offer brokerage accounts, ranging from well-known Wall Street giants like Merrill Lynch and Goldman Sachs, to little-known regional firms that generally service only a specific geographic area, and everything in between.
Transferring stocks, money, and assets to a different brokerage account is usually pretty easy, so don't be too concerned if you get the perfect brokerage account on the first try. In fact, many investors have multiple accounts with multiple brokers. Start with a discount brokerage account to minimize your expenses as a beginning investor. If you need advice about which stocks to invest in, you may need to look at other options, but even discount brokerages like Charles Schwab and Fidelity will provide investment advice to their customers.
Opening a brokerage account is easy. Just fill out the required forms. You can even fill the account opening forms out online for many brokerages, although you may have to return a paper signature form later. Don't forget that The Patriot Act requires financial firms to verify your identity, so don't get cute and use a fake name or address.
Once your account is open, you need to put some money in it to invest with. This process is known as funding your account and can be done in numerous ways. You can mail in a check with your application or transfer money from your bank account. The only thing you can't do is show up with cash. Anti-money laundering rules and regulations prohibit brokers from accepting cash in most cases.