How & where to buy shares in 2022

By:

James Knight

James is a lead editor for Invezz, where he covers topics from across the financial world, from the stock… read more.

Reviewed by Richard Stutely

Updated: Sep 8, 2022

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Learn how to buy shares and compare where to buy them on this page. Get top tips on how to be a successful investor and follow a step-by-step guide to buying your first share.

What are the best brokers to buy stocks now?

The stock trading platforms below offer a low-cost way to buy your first share. Choose one and sign up by clicking the links in the table, or keep reading to learn more about how to invest.

Most Popular

1

Min. Deposit

$ 10

Promotion

User Score

10

Up to $240 bonus!

Deposit with ACA, Wire, Pay with my bank

Invest for dividends and get payout on stocks on Ex-Dividend day

Start Trading more info

Payment Methods:

Bank Transfer, Wire Transfer

Full Regulations:

CySEC, FCA

Investoo Ltd is compensated if you access certain of the products or services offered by eToro USA LLC and/or eToro USA Securities Inc., as applicable. This compensation incentivizes Investoo Ltd to describe those products and services in favorable terms. Any testimonials contained in this communication may not be representative of the experience of other eToro customers and such testimonials are not guarantees of future performance or success.

2

Min. Deposit

$ 100

Promotion

User Score

10

Trade out-of-hours on over 70+ US stocks

Get exposure to a wide range of popular UK, US and international stocks

Enjoy flexible access to more than 17,000 global markets, with reliable execution

Start Trading more info

Payment Methods:

Bank Transfer, Credit Card, Debit Card, PayPal

Full Regulations:

ASIC, FCA, FINMA, is a licensed bank (IG Bank in Switzerland)

Spread bets and 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 spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

3

Min. Deposit

$ 0

Promotion

User Score

9.5

$0 commission and $0 Options contract fees

Upgraded research with advanced charts

Smart Menus for faster trades

Start Trading more info

Payment Methods:

Full Regulations:

How to buy shares for beginners, a step-by-step guide

The process of buying shares is the same, regardless of which company you want to invest in. This simple, step-by-step guide explains how to get your hands on the stock you want.

1. Choose an online broker and create an account

To own shares, you need a broker. A broker is a merchant for buying and selling shares online. All of the options listed on this page are ideal for beginners and some offer more advanced features for when you’re a bit more experienced.

Choose a platform and set up an account. You normally have to pass some verification checks in order to sign up, so be prepared to enter some personal information and supply some ID, like a driving licence and utility bill.

2. Decide how much to invest

Consider your own financial circumstances and make sure you don’t invest more than you can afford to lose. There is no fixed amount that you must have before you invest, but it’s good to set an upper limit on what you’re prepared to invest in advance, so you aren’t tempted to throw more money than you can afford into the market in the heat of the moment.

3. Choose which stock to invest in

You may already have an idea of which shares you want to buy; it might be Tesla, Microsoft, or another leading name. Take the time to research the companies, understand their business, and the potential threats to it. When you’re happy with your decision to invest, Sign into your broker account to make the trade.

4. Place an order for the stock

Each stock is listed on a stock exchange under a unique ticker symbol. Tesla is TSLA, while Apple is AAPL. Use this to search for the company through your broker and then enter the details of the trade; how much you want to spend on the shares and how many shares you want to buy.

5. Execute the order

Confirm the trade details and hit buy to execute the trade. As soon as you do, the order is sent to a queue to be processed. Stock exchanges are only open during weekday business hours, so you may have to wait 24-48 hours before you see your new shares in your account if you place the order on a weekend.

6. Review your investment regularly

It’s important to keep track of your investment and continue to research the company even after you own a share in it. Market conditions can change and at the very least there is new information every quarter, when the business has to file its financial results with the financial regulators. Stay on top of this information so you know when to sell, or when to buy more shares.

What is a share?

A share is a unit of ownership in a company. Shares (also known as stocks) are bought and sold on the stock market where the prices rise and fall in relation to a range of factors that broadly reflect the company’s current and expected performance.

Companies issue shares as a way of raising money, giving up part of the business in exchange for funds to run their operations. For your part, handing over some money (the price of the share) means you get to own a bit of the business.

How does the stock market work?

The stock market works as a marketplace where buyers and sellers come together to exchange shares. The phrase ‘the stock market’ is used to refer to the world of global finance as a whole, but in fact it is built up of a network of different stock markets around the world. 

The price of a stock can be impacted by many different factors and reflects the balance between supply and demand at a snapshot in time. Anyone can buy shares on a specific stock market and generally they’re used as a way of growing wealth in the future. Ideally, you want to pick stocks from good companies that increase in value over time so you can make a profit when selling them.

How to buy shares – top tips for success

You can improve your chances of turning a profit on your investments by following a few simple rules. The guidelines below can help you manage risk and reward and avoid making any mistakes early in your investing journey.

• Pay off any debts before you start investing. Investing is a good way to build long term wealth but in most situations you should pay off any loans or debts that charge interest first. This does not include a mortgage, but if you have spare cash to pay down your student loan, for example, that might be a better bet in the long run as it allows you to put aside more money each month afterwards.
• Figure out your budget. You can get started with virtually any amount of money but the size of your budget affects how you should invest it. If it’s less than £1000, you might be better off getting one or two shares in established companies or even investing a fixed amount in an index tracking fund every month. If it’s more, you can spread it over a wider range of shares.
• Invest in what you know. The legendary investor Warren Buffett once proclaimed that you should ‘invest in what you know’. If you aren’t sure which stocks to buy, this can be a good place to start. If you know an industry well, from professional experience or just a personal interest, use that to your advantage and start there.
• Invest gradually over time. It’s a good idea to start with small purchases until you have more experience. If your budget is £100, think about only spending £10 or £20 at a time. You never want to put all your money in one stock, and spreading out investments over time can be a good way to balance out short term volatility.
• Look for companies that pay dividends. Many businesses pay out a portion of their profits to shareholders in the form of dividends. These payments are paid per share and usually either quarterly or biannually. Reinvesting the dividends is a good way to unlock the power of compound interest, as it means you can use the dividends to buy more shares and earn more dividends in the future. However, you must weigh this against the potential increase in value of shares in a (fast-growing) non-dividend-paying company.
• Spread your money across different industries. Diversification reduces the risk of investing. By spreading money around assets where their performance is uncorrelated to each other, there is less danger of one incident affecting everything. Instead, your portfolio can ride out poor performance in one industry because the other stocks won’t be affected as badly, and may even benefit from the situation.
• Take advantage of tax breaks. If you buy shares in the UK you have to pay tax on any gains you make from investing. However, there are some ways to reduce the tax burden. You should use a stocks and shares ISA, which gives you up to £20,000 worth of tax-free investments every year, and you can set up a SIPP (a Self-Invested Private Pension) which entitles you to further tax breaks.

How much should I invest in shares?

You can start with as little as £50-£100, but there is no best practice and the answer is different for every person. How much you need to start with depends on what you want to invest in; a stock like Tesla, for example, may cost hundreds of pounds, while many stocks in the UK are available at less than £10.

The best policy is to set aside some money each month and use that to buy shares. As a general rule, you should only start doing this after you’ve paid down any debts and put 2-3 months’ wages aside as an emergency fund in case your financial situation suddenly changes.

How do I pick a good stock?

The short answer is research. There are plenty of quality businesses out there and a huge amount of information is available for free online. Choose an industry or company that you’re interested in and then look at the financial results, its competitors, and read what analysts have to say about the stock. 

What are the risks of buying shares?

The biggest risk is that you can end up with less money than you started with. Stock prices can go down as well as up, and even if you research a company thoroughly its performance is out of your control. Unforeseen events and market downturns can have a significant impact on the bottom line.

This is particularly true if you invest in companies with no track record of making a profit or which operate in new and unproven industries. Often, the greater the potential future rewards, the higher the risk in the short term. Here are some more risks, as well as the benefits, of buying shares.

What are the fees for buying stocks?

It varies from broker to broker. Some brokers charge a monthly subscription, others charge a flat fee on every trade, and a few platforms offer completely free trading. Monthly subs can range up to £12 or £15 per month, normally with a free trade or two thrown in, while flat fees can be around £5 or £7 per trade.

What are the best stocks to buy now?

The best stocks depend on many factors, like price, potential, and how much market share they own. When you first invest the safest choice is to choose large, established companies with a dominant brand name, like Apple or Google. Read our guide to find out which companies look like the best stocks to buy right now.

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