To learn how to buy stocks online, you need to open a stock trading account. These are offered by banks and dedicated stock brokers, and most can take trades online and via the phone. There are two kinds of online stock brokers:
- Full Service Stock Brokers are more expensive but they can help you with your stock selection and offer market advice. This doesn't mean they are always right! But as a beginner they could help you avoid some deadly pitfalls in the hectic world of stock trading.
- Discount Stock Brokers are cheap and only charge a few dollars per trade. This is because they only execute your instructions to buy or sell a particular stock. They can't give you any growth stock tips or advice, so you have to do your own stock research.
Stock trading is not random. Any investor who buys stocks on a whim is out of their mind! Instead, when learning how to buy stocks online, many beginners take up Fundamental Analysis; a technique for selecting growth stocks that involves looking at the underlying business of a company stock. Use this as your fundamental investment guide:
- Revenues - are sales growing year-on-year?
- Profitability - are profits growing year-on-year?
- Debt - is the company wallowing in expensive debt?
- Management - how skilled is the management team?
- Market Sector - what are business trading conditions like?
- Forecasts - what do analysts forecast in the next financial results?
- Dividends - does the stock pay any regular income to investors?
- Broker Ratios - is the stock is cheap based on its current profitability?
No-one expects you to become an expert in growth stock analysis overnight, but paying attention to these features will help you pick strong growth stocks to invest in. With time, you will easily be able to separate the wheat from the chaff.
The information you need to begin your Fundamental Analysis is in the company website, reports by online stock brokers, investment guide websites, and investment magazines and tip sheets. Armed with this knowledge, you will learn how to buy stocks online and make money while you're at it.