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How to buy shares online in 2020

Good news, buying shares in company stocks is one of the least complicated investment methods available to new investors.

Nonetheless, it’s important to arm yourself with a good level of basic knowledge before you make your first move. We’ve produced this step-by-step stocks and shares for beginners guide, alongside an array of easy-to-digest educational articles, to support you on your journey towards becoming a successful stock market investor.

For those of you who are ready to invest in stocks, you just need to select your broker below. If you don’t feel you’re ready yet, keep reading on.

Buy company stock online, right now

Ready to invest in shares? Click on the links below to choose which broker you’d like to invest with. Our helpful guides will walk you through the best investment choices and clarify how they work.

eToro
Key Features
Limited special offer - 0% Commission & 0% Stamp duty on ALL Stocks!
Award-winning platform - buy physical asset or trade with leverage
Over 11 payment methods, including PayPal
Min Deposit
$200
United States
Key Features
Limited special offer - 0% Commission & 0% Stamp duty on ALL Stocks!
Award-winning platform - buy physical asset or trade with leverage
Over 11 payment methods, including PayPal
Key Stocks
  • Disney
  • Alibaba
  • Microsoft
  • Amazon
  • Tesla
Payment Methods
Credit Card, Debit Card, Wire Transfer, PayPal, Skrill, Neteller, Yandex, WebMoney, UnionPay, MoneyGram
eToro is a multi-asset investment platform with more than 2000 assets, including FX, stocks, Crypto, ETF’s, indices and commodities. eToro offers a wide range of cryptos, such as Bitcoin, XRP and others, alongside crypto/fiat and crypto/crypto pairs. eToro users can connect with, learn from, and copy or get copied by other users.
Cryptoassets are highly volatile unregulated investment products. No EU investor protection. eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro. Your capital is at risk.
FOREX.com
Key Features
Access over 220 of the most popular company shares
Trade on spreads from 1 pt on UK shares
Go long or short on global top companies
Min Deposit
$50
United States
Key Features
Access over 220 of the most popular company shares
Trade on spreads from 1 pt on UK shares
Go long or short on global top companies
Key Stocks
  • Amazon
  • Twitter
  • Barclays
  • Apple
  • Tesla
Payment Methods
Debit Card, Bank Wire, ACH, Credit Card, PayPal
Founded in 1999, part of GAIN Capital Holdings. Licensed in highly regulated juristictions, FCA, IIROC, NFA, CFTC, CIMA,FSA. Payment methods ACH, debit card, bank wire transfer. $50 minimum deposit.
Forex trading involves significant risk of loss and is not suitable for all investors.
Consors
Key Features
Fixed Term Funds
2.10% pa For 12 Months
Live Market Charts
Min Deposit
$250
United States
Key Features
Fixed Term Funds
2.10% pa For 12 Months
Live Market Charts
Key Stocks
Payment Methods

What are stocks and shares?

A share is a certificate of ownership for a percentage of a stock. A stock is public company that’s listed on a stock exchange.

Stocks are financial instruments issued by companies (in the form of shares) that help those companies raise capital for operations and other purposes. This is made possible when a company goes public, allowing potential investors to buy into the company.

Buying shares as a long-term investment isn’t really the same as share-trading. When we refer to share-trading, we’re usually talking about shorter-term speculation. A trader typically attempts to capitalise on technical analysis and short-term trends to make a quick profit. When investors or traders execute transactions online, they are buying or selling through online or mobile networks, usually through a broker. More on the difference between holding and trading stocks below!

How to buy stock in 6 simple steps

Here’s a quick checklist to follow as you learn how to buy shares online, use this to help take your first steps into the world of stock market investing.

  1. Learn the basics. This includes all the terminology that comes with stock investing, the different types of stocks and the different ways you can invest in stocks. We have courses for that right here.
  2. Decide your budget. It’s sensible to limit yourself to small investments when you first start out. As you gain experience, you can raise the amount of capital you’re willing to risk and venture into more complex forms of investments.
  3. Choose a broker. There are many different online brokers you can use to buy and sell shares of stock, including plenty of brokers that won’t charge more than a few pounds per trade. Find a broker that combines an easy-to-use platform with low fees and a strong reputation. Check out our broker reviews for a helping hand.
  4. Research the stock you want to invest in. Twenty years ago, it seemed like every stock with “.com” at the end of its name was a superstar. But when the calendar flipped to 2000, the .com stocks that lacked healthy revenue streams and reliable profits got absolutely hammered. When picking the stock you want to invest in, target companies that deliver consistent revenue and profit growth and look for reliable business models. You can scrutinise a company’s financials by requesting copies of their prospectus or doing your research on our site.
  5. Assess market conditions. Ever heard the expression, ‘a rising tide lifts all boats’? When the stock market is going up sharply (a ‘bull market’), most stocks will rise. When the stock market is going down sharply (a ‘bear market’), most stocks will fall. It’s usually wise to follow the broader market trend, rather than try to fight the tide.
  6. Make your first investment. You’ve learned the basics of stock investing, figured out your budget, found a broker you like, found the stock you want to invest in, and ensured that the market is working in your favour. From here, simply log onto your online brokerage account, type in the ticker symbol of the stock you want to buy, make sure that the price the stock is currently trading at isn’t too steep, then hit the Buy button. Within seconds, you’ll be the proud owner of shares of that company.

How to buy, sell and hold shares for beginners

Understanding the basics for each investing strategy is important when beginning your journey. Here’s what you need to know:

Buying shares

Generally, this involves setting called a bid price, meaning you’re requesting to buy shares at a given price. The broker lists the bid price as well as the ask price, with the ask price representing the price at which another party wants to sell you those stocks. Usually, the spread between the bid and the ask won’t be larger than a few pence per share, no big deal if you’re buying a quality stock. After a couple of seconds, the broker will inform you of the actual price you were able to buy the stocks at.

Selling shares

This is simply the flip side of buying shares. You enter the price at which you’d like to sell, the broker will list that price along with another price a few cents away, and after a couple of seconds, you’ll find out what the actual sell price was. To make money on your investment, you simply need to sell the stock at a higher price than the one at which you bought them. 

Holding shares

By holding shares you’re betting on the longer-term future of the company you bought. We recommend this strategy to beginners because effective short-term trading requires knowledge of how to read stock charts and perform technical analysis, skills that can take a long time to master. Also, the stock market has historically trended upward, albeit sometimes with nasty interruptions in the form of bear markets. If you’re willing to be patient, and you’ve found a company with strong fundamentals, the long-term payoff can be substantial.

Types of investments and ways to invest

There are many stocks you can choose, with about 2,800 different choices on the New York Stock Exchange alone. The type of stock you opt for will depend on the investing strategy you want to use. For instance, if you’re looking for a blue-chip stock with a proven track record of success, you might opt for a company like Apple. On the other hand, if you’re in the mood to speculate, you could buy shares in a far less established company that specialises in exciting new technologies such as blockchain or artificial intelligence.

Beyond simply choosing one individual stock, there are numerous other stock investing options that allow you to own stocks in multiple companies at one time, defer tax payments on investing profits and more. Here’s a list of investment vehicles:

  1. Stocks. As mentioned above, investing in stocks is a relatively simple process. But the devil is in the details. If you own shares of only one stock, you’re putting all your eggs in one basket. It could pay off with a big gain, but you’re also making yourself vulnerable to a sizable loss. One strategy to help mitigate your risk is to put in a stop-loss order with your broker. Say you buy 10 shares of a stock at £50 per share, and put in a stop-loss order at $45 – you’re safeguarding against significant losses by ensuring you won’t lose more than 10% on your investment.
  2. Mutual funds. A mutual fund is a type of investment that’s made up of many stocks. Mutual funds are composed of stocks that have been selected by a professional money manager who’s researched each investment carefully.  Also, by owning stock of multiple companies at once, you’re diversifying your investment, meaning you’re less susceptible to big, sudden losses. The fund manager will typically charge a fee for his services. 
  3. Exchange-traded funds. An exchange-traded fund (ETF) is an investment fund traded on stock exchanges. They’re as easy to buy as individual stocks – simply place your order then wait and see the final buy price. An ETF can comprise all kinds of different industries and investment strategies. You can choose an ETF made up of technology stocks, commodities stocks, healthcare stocks, or even an ETF that mimics the action of the broader market (such as the SPDR ETF, which mirrors the action of the S&P 500). Like mutual funds, ETFs are a good way to diversify your investment strategy and avoid the risks of a single stock investment.
  4. Index funds. An index fund is a type of portfolio specifically designed to match the components of a market index, such as the S&P 500. Because it’s run like a mutual fund, there are fees that come with it that you won’t have to pay when buying shares of an ETF.. But those fees tend to be low since the fund manager doesn’t need to put forth much research effort compared to when a fund hand-picks individual stocks that don’t all belong to one index. 
  5. ISA/IRA/401(k) accounts. Most countries charge capital gains tax when you sell a stock for a profit. Different countries offer different investment vehicles to help defray or delay those tax payments. In the UK you can house your stock investments within an Individual Savings Account (ISA), while in the U.S. you can opt for an Individual Retirement Account (IRA) or a 401(k). Read up on the best tax-deferred investment strategies in your home country, then choose the one that works best for your financial goals.
  6. Financial & Robo-advisors. If you don’t have the time or the inclination to investigate the best investment options, a financial advisor can do that for you. Financial advisors are professionals who suggest investment opportunities to their clients based on their financial situation and goals. Robo-advisors follow the same general principle, except that investment decisions are made based on computer models. The most advanced roboadvisors sometimes use artificial intelligence to guide investment suggestions. You’ll typically find roboadvisors on a financial app or website.

Buying shares in a single stock is a straightforward route into investing but, because they offer risk minimising diversification, ETFs and index funds are well worth considering when you’re just starting out.

Whichever method you choose, it’s never a bad idea to learn more before you invest. You can get up to speed by reading our guides and courses. Alternatively, if you’re ready to invest, head back up and click on the links to select your broker.

Our top tips for investing in stocks

By now, you should have a broad overview of how to invest in stocks. Here are some key points to remember.

  1. Be sure about your budget. Be sensible. The amount you invest mustn’t exceed your means. You don’t want to end up in debt.
  2. Choose the right approach. Make sure the investment strategy you’re pursuing fits your investment goals, and your tolerance for risk.
  3. Stick to a logical investing plan, rather than reacting to emotions. If you follow a sound plan, you’ll be more likely to find success. Falling victim to emotions like fear and greed can torpedo your results if you’re not careful..
  4. If market conditions change, have a plan for how to react. When financial markets rise or fall, you can make decisive moves to avoid being dragged along for the ride. It’s important to make decisions while keeping those prevailing market conditions in mind.
  5. Learn from your mistakes. You’re going to be wrong a lot when investing in stocks, whether you’re a beginner or an expert investor. Take some time to go over your losses. Figure out what went wrong and analyse your strategic failings. You can apply these lessons in the future and hopefully produce better results.

And, what are the best shares to buy?

If you’re not sure where to go from here – that’s fine! It’s tough deciding which stocks to buy so we’ve produced this guide. Here’s a shortlist of considerations to help you decide how to proceed:

  • Consider your available budget. If you have a budget of £1,000 or less, you may wish to limit the number of investments you make. Say you go online and buy shares of 20 stocks, at a cost of £10 per transaction. You’ve already eaten up at least 20% of your investing budget on fees alone. Keep things simple by either buying a small number of stocks (say, one or two) or simply investing in a mutual fund, ETF, or index fund. Conversely, if you have a larger budget (let’s say greater than £10,000), you have a larger number of logical options to work with, including buying a larger number of individual stocks. Tax implications also matter more when you invest more, so do your research on ISAs, IRAs, and other investment vehicles that let you limit or defer tax payments.
  • Be sure to perform a risk assessment. The more you know, the better equipped you’ll be to understand and deal with risk. If you’re interested in putting in the time to learn, more complex investing options could make sense for you. For instance, you can choose to sell stocks short, betting that their price will go down, not up. If you don’t feel you’re ready for that level of complexity, or even the level of risk that comes with owning one or two stocks, lower-risk investment options such as an index fund could make more sense. 
  • What are market conditions telling you? Say stocks have tumbled into a declining market (also called a bear market). In such circumstances more defensive investment strategies, such as bonds or commodities, tend to make the most sense. On the flip side, if stocks are performing well, you can take advantage by snapping up individual stocks, ETFs, and index funds, depending on how closely you’re willing to keep tabs on your investments.
  • Set yourself reasonable investing goals. If you’re trying to make money quickly, you’ll need to learn the ins and outs of faster-moving investments like day-trading stocks (buying and selling stock on the same day). If on the other hand your timeframe can be measured in decades, you might opt to simply pick a good mutual fund and let the professionals do the work.
  • Keep track of emerging trends. Technology is always evolving, and with it comes exciting new investment opportunities. When Internet usage took off, stocks like Google and Apple reaped the benefits. When consumers began staying home more to watch their favourite movies and shows, Netflix took flight. Keep an eye out for the next big thing, be it artificial intelligence, blockchain or new forms of technology that haven’t come to light yet.
  • Trade the largest company stocks at first. While you’re still at the beginner level, it’s often much easier to make money consistently using larger, reputable companies that aren’t going anywhere for the foreseeable future. This is because the general trend for bluechip stocks is overall, upwards, which is visibly true based on years of price-data. Example of the best shares to buy over the last 10 years include; Tesla, Coca-Cola, Disney, Amazon, Apple, Microsoft.

Try some of our stock market courses for beginners

Still not ready? We get it. We recommend sticking around and learning stock investment fundamentals via our easy-to-understand educational courses. Learning the ins and outs of stock investing will help you to reach a point where you feel better informed, more confident and ready to take the plunge.

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By Harry Atkins
Harry joined us in 2019 to lead our Editorial Team. Drawing on more than a decade writing, editing and managing high-profile content for blue chip companies, Harry’s considerable experience in the finance sector encompasses work for high street and investment banks, insurance companies and trading platforms.

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