How to buy shares online in 2021

Buying shares can be a great way to put your money to work and grow wealth over the long term. This beginner-friendly guide has everything you need to get started, along with comparisons of the best trading platforms to use.
By: James Knight
James Knight
When he isn’t at work, James is an avid trader and golfer who likes to travel. He once fed, rode, and… read more.
Updated: May 17, 2021
Tip: our preferred broker is, eToro: visit & create account

This page explains everything you need to know about stocks and the stock market. Learn what to look out for when you choose a broker, the different ways to invest, and whether you should jump in now – then get some tips on how to buy your very first share.

Compare the best trading platforms

You can use any one of the brokers below to get started straight away. All the platforms in this list have been assessed and reviewed by our team of experts. If you’re not ready to do that just yet, then scroll down to follow our step-by-step guide.

1
Min. Deposit
$50
Exclusive promotion
Our score
10
Trade/invest in stocks with just $50
Invest for dividends and get payout on stocks on Ex-Dividend day
Over 11 payment methods, including PayPal
Start Trading
Description:
eToro is a multi-asset investment platform with more than 2000 assets, including FX, stocks, ETF’s, indices and commodities. eToro users can connect with, learn from, and copy or get copied by other users. Buying stocks on eToro is free and you can invest with as little as $50.
Payment Methods
Wire Transfer, Bank Transfer
Full regulations list:
CySEC, FCA
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.
2
Min. Deposit
$10
Exclusive promotion
Our score
9.3
0% Commission Account
Low Spreads
Eco-Account Option
Start Trading
Description:
CedarFX is an eco-conscious broker offering 0% commission trading on 170+ assets, including Forex, Cryptocurrency Pairs, Stocks, Indices and Commodities. With up to 1:500 leverage, no-fee transactions and low spreads, traders can make the most of their funds. CedarFX also offers an Eco Account option to support tree planting and sustainability projects.
Payment Methods
Bitcoin, Credit Card, Debit Card
Full regulations list:
Please ensure that you fully understand the risks involved, taking into account your investments objectives and level of experience, before trading, and if necessary seek independent advice.
3
Min. Deposit
$1
Exclusive promotion
Our score
8.7
0 Commissions and no deposit minimums
Registered with and regulated by SEC and FINRA
Loss of cash protection
Start Trading
Description:
Financial company driven by technology and offering all-in-one self-directed investment platform that provides excellent user experience.
Payment Methods
Full regulations list:

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 how the company performs. 

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 each share fluctuates based on supply and demand. 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. 

If you want to learn more about how it works, use our guide to the stock market, otherwise keep reading for our quick step-by-step guide.

How to buy shares for beginners

Regardless of which shares you want, the process is simple. If you follow the steps below, you’re going to be able to get the stock you want quickly and easily. 

  1. Choose a broker. To own any shares, you need a broker. A broker is just a merchant for buying and selling shares. 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.
  2. Create an account & deposit funds. Once you’ve chosen a broker, create an account and deposit some money. You can often get started with as little as £100.
  3. Choose a company to invest in. Do you want to own big names like Facebook or Google? Or are you looking for stocks in a particular industry? We have lots of resources that you can use to help you decide which shares to choose.
  4. Make your first investment. Now that you’ve chosen a broker, signed up, and chosen what you want, you’re ready to enter the stock market. On your broker’s website or app, search for the stock using its ticker symbol (AMZN or GOOGL, for example). You’ll be taken to a page that looks a bit like a checkout on any online merchant, here you enter the number of shares you want or the amount you want to spend.

When it comes to selling your shares, it’s exactly the same but you click ‘sell’ instead. And remember that this is just the basics, there’s a lot more to think about if you want to build up a portfolio; like how much to invest, how long for, and which companies to choose. We’re going to help you answer all those questions right here.

Investing vs trading

There are two different strategies for buying shares. The biggest difference between them is the timeframe: investors have more of a long term view, while traders focus on the short term. They aren’t mutually exclusive, and many people choose to do both at the same time.

The best strategy for you depends on how soon you want to see returns, the amount of time you want to put into managing your portfolio, and your attitude to risk. To help you decide which option you want to give more attention to, here’s a quick summary of each one.

Investing long-term

Investing is best for beginners and anyone who wants to build wealth over the long term. If you’re thinking about the future then the stock market tends to offer up better returns than a savings account. It can do much better if you pick some good stocks: a share in Amazon cost a little over $1 in 1997 and is now worth more than $3000.

The theme of investing like this is patience and sticking to a plan. The best way to beat the market is spending small amounts over a long period of time and not overreacting to small price changes. You want to focus on the fundamentals of a company, such as its finances and future prospects, and you can reduce the risk of one stock going wrong by investing in lots across different industries.

When you’re investing long term the time frame for returns is measured in years rather than weeks. You don’t need to dedicate time to micromanaging your portfolio every day and you should be more concerned about the stock price in six months or a year rather than what it is today.

Trading short-term

Trading means moving shares quickly to take advantage of small changes in the price. The time frame for seeing returns is much shorter, the idea being to trade a lot of shares and make a small profit each time. 

The most common way to trade is to use something known as a contract for difference (CFDs). With a CFD you speculate on the price of a share rather than owning it yourself. This means you can bet on a share price to go down as well as up, but don’t get any of the benefits of owning the stock.

Instead of basing your decisions on the fundamental performance of a company, when you trade you use trading patterns to help you. These patterns give you clues on when to buy or sell a stock. It can take time to fully understand technical analysis and how to trade successfully, so we advise beginners to steer clear until you have more experience.

Top tips for investing in stocks

Long term investing is the best way to get started on the stock market. It’s less risky than trading for beginners and you can drip feed money into your favourite companies over time. Here are our top tips for how build your own portfolio:

  • 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.
  • Consider how soon you want to see returns. How quickly you want to generate profits will impact your investment strategy. In general, you should be looking far into the future and trying to turn £1,000 into £10,000 over many years. You can make money faster if you pick small-cap or growth stocks that hit big, but that means taking on more risk.
  • Decide how much risk is too much. Large companies are usually safer investments than small ones because they’re less influenced by market volatility. This means you can minimise risk by going with blue-chip companies – ideally more than one so you’re not overly exposed to one company’s performance. Deciding how much of your portfolio to spend on larger companies is a good way of choosing an acceptable level of risk.
  • Research the stocks you want to buy. You might already know which stocks you want, or you might be looking for the right opportunity. Either way, it’s important to do your research. Look into each company’s past performance and plans for growth before investing, and make sure you understand the difference between different types of stock to help build a balanced portfolio.
  • Create a plan and stick to it. The stock market can be a bumpy ride. You need to have a long term plan so that you don’t overreact to every good or bad day and are prepared for extreme events. Sometimes it’s right to sell and take a loss, but even a market crash (like the one caused by the COVID-19 pandemic) can be an opportunity if you keep money aside to for when prices are lower.
  • Start investing gradually. 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.

And while it’s not worthy of a top investing tip, a good broker can make or break your investing experience, especially in terms of the fees they charge, or the speed to react to the market. We’ve covered this in more detail below.

How to choose a broker

Selecting a broker is one of the most crucial parts of getting started on the stock market. They handle your money, decide how much you have to pay in fees, and you’re going to be doing a lot of your work from within their platform. Here’s what to look out for when you choose one:

  • Ease of use. You want a broker that’s easy to use. An intuitive interface is a must, especially if you’re new to the stock market. Choosing one with a good mobile app is important if you want to be able to access your portfolio from anywhere.
  • Range of stocks available. You don’t want any restrictions on your trading. Some brokers limit you to a particular stock exchange or only offer trading on the biggest companies. If you’re going to be looking for undervalued or less popular stocks, make sure you pick a broker that lets you find them.
  • Fees and commissions. Brokers make money by charging you for certain actions. Often you have to pay a fee on each trade or to deposit or withdraw money. If you’re going to be an active trader, look for a broker with low (or no) trading fees.
  • Payment methods available. Most brokers will accept deposits via debit card or bank transfer. If you want to pay using another method – like PayPal – it might not be available at all in some places so check before you sign up.
  • Reputation and regulation. You want to be confident that you’re protected if anything goes wrong. Pick a broker that’s regulated by the financial authorities in your country and have a read around to get a feel for its reputation – our reviews can help you.
  • Customer service. You never know when you might need help on things like accessing your money or your account itself. When your money’s at stake, don’t tolerate bad customer service. It’s another area where research is a good idea, that way you can see if other people have horror stories that can help you steer clear.

Still undecided?

There’s a lot to take in when you dive into the stock market and it’s a good move to take time to think it through. If you haven’t made a decision over whether to get involved yet, here’s a quick summary of the pros and cons, then some more questions to help you decide.

Pros

  • You can build your wealth in the long run
  • The stock market can offer better returns than a low interest savings account
  • Your knowledge of specific industries or companies can be a big help when picking stocks
  • Being a shareholder can entitle you to dividends 

Cons

Before you make a final decision on whether to invest in stocks, let our answers to these three questions guide you.

1. Is it a good time to buy shares?

It depends on the company, especially if you’re a long term investor. There are times when wider market forces come into play and the majority of stocks are trending up or down (known as bull and bear markets, respectively). Even then, some types of stock grow more slowly in the boom times but are more resilient when the going gets tough.

The important thing is research. If you’re interested in Tesla, for example, then you might want to think about who its competitors are and whether there are any developments on the way that could affect its prospects. For Tesla that could mean it unveiling a new car, or opening a new factory to build more. Use the latest news in the market to help you:

Adobe Inc (NASDAQ: ADBE) reported its financial results for the fiscal second quarter on Thursday that topped Wall Street estimates. The company attributed its hawkish performance to the COVID-19 driven digital acceleration. 1. Financial performance Adobe said that its net income in the second quarter printed at $1.12 billion…
Evercore ISI’s Mark Mahaney forecasts ridesharing companies like Uber Technologies Inc (NYSE: UBER) to recover slowly from an unprecedented hit from the Coronavirus pandemic. On CNBC’s “Closing Bell”, however, he was optimistic that things were starting to pick up, laying the groundwork for a steady recovery. Mahaney said:…

2. Do you know which companies you want to invest in?

If you already have a good idea of what you want, great. If it’s a big name like Apple, Disney, or Microsoft, then these stocks are some of the most popular, so they’re also quite expensive. As a general rule, you have to decide on a trade-off between price and risk, large-cap stocks are usually (although not always) the safest.

If you don’t know what to buy yet, then the legendary investor Warren Buffett has some advice for you. He once proclaimed that you should ‘invest in what you know’. 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. 

You should also use your own research to supplement what you already know. You can dive into new industries to look for investment ideas, or look into the competitors of the companies you’ve already picked out. That way you can get a good feel for which ones are likely to perform better. The latest market analysis can help too, so you don’t miss out on anything you need to know:

Apple shares have weakened from their recent highs above $140, and the current price stands around $128. Apple reported better than expected second-quarter results last week, and the company increased the quarterly dividend by 7.3%. Fundamental analysis: Morgan Stanley raised its target on Apple from $158 to $161 Apple shares…
Under Armour (NYSE: UAA) shares have weakened from their recent highs despite better than expected first-quarter results. The U.S. stock market is losing some ground this Tuesday, which also negatively influences Under Armour shares. Fundamental analysis: Under Armour shares are not undervalued Under Armour is an American sports equipment…
McDonald’s shares advanced after the company reported better than expected first-quarter results and closed the week at $236,08. Fundamental analysis: UBS raised its price target from $240 to $255 Even with the COVID-19 pandemic, this company’s business is going well, and McDonald’s reported better than expected first-quarter results last week.

3. Do you want to hold stocks for the long term?

It’s the best way to build wealth. You can pick stocks and leave them to grow in value over time, without needing to check in every day. If you want to be a fast-paced trader, then that’s a very different strategy where you want to get in and out of stocks quickly. Finally, here are a couple of pointers for whichever method you choose.

Considerations for a long term investment strategy

If you’ve done your research and feel confident a stock is going to increase in value, you want to buy some of its shares. Decide how much of your money you want to put in this one stock (ideally you want to choose multiple stocks to minimise risk) and then find a broker.

Considerations for a short term investment strategy

Trading is a very different skill. If you’re happy with the risk and feel like you have the right temperament to do it well, then you should pick a broker that charges low trading fees to get started. You want to learn all about how to analyse trading patterns as well.

Latest stocks and shares news

The Honest Company (NASDAQ: HNST) has reported mixed first quarter results on Wednesday that resulted in shares trading lower 8% Thursday morning. Q1 recap: sales beat overshadowed by losses Honest Co reported a sales beat in the first quarter of $81.03 million versus expectations…
Constellation Brands Inc (NYSE: STZ) made headlines on Thursday as it took a minority stake in Aaron Paul and Bryan Cranston’s mezcal brand, Dos Hombres. The news comes more than a month after the Fortune 500 company reported a decline in its net income in the fiscal fourth…

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James Knight
Financial writer
When he isn’t at work, James is an avid trader and golfer who likes to travel. He once fed, rode, and ate an ostrich all on… read more.