How to Invest in Stocks 2023 – Beginner’s Guide

Stocks are one of the best investments for both long-term and daily trading. People are attracted to stocks for this reason. The problem is that many of these investors are newcomers to the stock market and aren’t yet familiar with its potential benefits and potential pitfalls.

On some platforms, buying stocks can come with quite a high commission. Here is a guide that can tell you everything you need to know about where you can trade at no extra cost and how to invest in stocks.

How to Invest Stocks – Quick Steps

If you want to learn how to invest in stocks, a good platform is mandatory. To invest in stocks, eToro is an excellent wise choice and here you will find how to invest in stocks in eToro.

Step 1: Open an Account with eToro

To invest in stocks, eToro requires your name, email address, and password to create an account.

Step 2: Upload ID

However, the next step is mandatory regardless of whether you created your account through Facebook, Gmail, or from scratch. All regulated platforms require customers to complete the KYC procedure or verify their identity.

Your account will need to be verified by providing private information and uploading photos of your ID, driver’s license, or passport. eToro may also request a copy of your bank statement to confirm that the address on your application is the same as the one on your bank statement. By doing this, you will be near to investing in stocks.

Step 3: Deposit Funds

Before you can invest in stocks, eToro allows you to deposit funds once your account is set up. In addition, you can use credit cards, debit cards, and PayPal to fund your trading account.

Step 4: Buy Stocks

You can then start to invest in stocks on eToro after your account has been funded. Let’s take BP as an example. To open a new order, we’ll enter ‘BP’ into the search box at the top of the page and click on ‘TRADE.’ Next, we will place our first stock trade by entering the amount we wish to trade and clicking ‘OPEN POSITION.’

67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

Learn the basics of Buying Stocks in the US

You can invest in thousands of global stocks in today’s market by simply clicking a button. All you need is an online stock brokerage account.

Furthermore, with hundreds of stockbrokers competing for your business, commissions and fees have never been lower. It is even possible to invest in stocks without paying any dealing fees on share dealing platforms.

Nevertheless, along with learning how to invest in stocks, you should learn how stocks work, invest, and tax rules and benefits exist. You stand the best chance of avoiding costly mistakes if you become familiar with the fundamentals. Once you have bought stocks in a company, they must send you a stock certificate within two months.

What Are Stocks

The act of going public involves a company being listed on a stock exchange. By doing so, everyday investors can purchase ‘shares’ in the company. You own a stock of the company you invest in – proportionate to the number of stocks you hold.

Stock values depend heavily on the market. As a result, the stock price will rise if more buyers than sellers. That, in turn, will increase the value of your investment.

As a result, your stocks will lose value if more sellers than buyers. The company, however, will be able to offer you several benefits as a shareholder. That’s why you must be careful and know how to invest in stocks.

Selling Stocks

Dividends are among the most important aspects of this, as is the ability to vote at Annual General Meetings (AGMs). Stocks can be sold at any time during normal market hours. Depending on how many shares you hold and the company’s current stock price, you will receive cashback. This guide about how to invest in stocks will lead you to some of the best stocks to invest in.

How Much Money Can You Make From Investing in Stocks

It depends on the stock you invest in and how this one performs. That is not an easy movement and how to invest in stocks is a skill that you must develop to do take the best decisions.

How to Make Money from Stocks

1. Capital Gains

It is known as ‘capital gains’ if the value of your stock is higher than the original purchase price.

For example:

Let’s say you buy 1,000 stocks of BP at 350p each. You have invested $3,500 in total.     BP stocks are now priced at 450p per stock five years later. You decide to sell your stocks to realize your gains. At 1,000 stocks, you made $1000 profit (450p-350p).

The $1,000 profit is what’s known as capital gains. Capital gains must be reported to HMRC. The exact tax rate you pay depends on your circumstances.

2. Dividends

Dividends are another way to earn income from shares. Dividends are a way for large companies to share profits with stockholders.

When the proceeds are received, you will be entitled to your share. In addition, you will receive a specific dividend income based on how well the company is performing. Dividends are not paid on all shares, but they are typically distributed every 3 to 6 months if they do.

Dividends are the best thing about capital gains because you will also receive them. So, ideally, you would invest in stocks that increase in value and pay regular dividends simultaneously!

Here are the average annualized returns of the FTSE 100 over the past 25 years. But, of course, past performance is never a guarantee of future performance.

3. Compound Growth

Most investors prefer reinvesting an asset’s earnings to generate more income over time rather than cashing out capital gains or waiting for dividends. That is called compounding. A compounding effect can be achieved by holding a stock for a long time and constantly reinvesting capital gains.

67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

What to Consider Before You Invest in Stocks in a Company

Historically, the stock market has performed well – this is not the case with all businesses. Thus, many companies are now only worth a fraction of what they were worth at their all-time highs, both in the US and overseas.

Here are some helpful share tips that will help you mitigate your risk when learning how to invest in stocks for the first time.

Tip 1: Diversify as much as you can

Diversification, then, is the opposite of putting all of your eggs in one basket. In other words, rather than investing in just one or two companies, a well-diversified portfolio would consist of dozens, if not hundreds, of different stocks. In addition to this, you will be investing in various industries, thus avoiding overexposure to one specific niche. For example, let’s say you have $5,000 to invest in the stock market.

An inexperienced investor might invest the entire $5,000 in one company

A wise investor would probably purchase shares of 100 different companies at $50 each. The investment would also cover multiple sectors.

Tip 2: Start with low stakes

You might want to start with lower stakes if you have never invested in stocks before. Typically, most regulated stockbrokers require a minimum investment between $100 and $200. You do not need to invest the entire balance in one trade.

Platforms such as eToro, on the other hand, permit a minimum stock investment of $50 (about £40). Therefore, starting small will build your confidence without breaking the bank.

Tip 3: Learn how to research stocks

In addition to learning how to buy stocks, you should also learn how to research stocks. We are not referring to anything overly complex like technical analysis or chart reading. Instead, keep track of any market developments that could impact the value of your investment, on the contrary.

• Let’s say you invested $3,000 in Royal Mail
• What effect will cutting hundreds of jobs by Royal Mail have on its share price if it announces its plans for job cuts?
• Negative news such as this would undoubtedly result in a mass sell-off from investors.
• As a result, the value of the shares will decrease.
• In light of the above, if you sold the shares as soon as the news was announced, you would have the best chance of minimizing your losses and getting back as much as possible.

Adding a third-party news alert platform to your contact list might be worth your while. For example, you can add your invested companies to Yahoo! Finance’s portfolio and then receive real-time news when relevant stories break.

 Tip 4: Consider a copy trading portfolio

A copy trading portfolio might be worth considering if you have little or no knowledge of how stocks and shares work. You can mirror the trades of experienced investors on beginner-friendly platforms like eToro.

They include not only their current portfolio but all of their investments. Before investing money, you can review the credentials of the trader. You can essentially invest in shares without doing any work with copy trading, so it’s very popular among new investors.

Where You Can Buy Stocks in the United States?

1. eToro – The Best Platform To Invest In Stocks

eToro tops our list of the best stock breakers globally, which we consider the best overall. More than 20 million traders use the platform in more than 140 countries. With eToro, you have access to over 2,400 global markets, and you don’t have to pay a commission when you buy shares. There is no additional charge for even the top 10 best stocks to buy right now. The platform charges spread, but they are very low and quite affordable.

eToro is extremely user-friendly, which is why it is so popular. It knows that now is the time for retail investors, so it does all it can to provide them with a safe place with top stocks to buy. However, it was designed specifically for newcomers, to the point where experts find its features too easy to use.

As well as social trading, eToro also offers automated trading, in which you can set up specific parameters, and the software does the trading for you. Finally, Copy-trading is the most important feature of this platform. It allows you to find a professional trader who trades stocks you are interested in and copy their moves. As a result, even if you don’t know what is going on, you can still profit.

CySEC, the FCA, ASIC, and others are among the biggest regulatory bodies in the world that regulate eToro. In addition, it also offers a variety of other benefits, including cryptocurrencies, if you wish to diversify your portfolio even further.

eToro fees

67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

2. Webull – A User-Friendly Platform To Invest In Stocks

A user-friendly brokerage platform, Webull was launched in 2017 and can be accessed online or via mobile apps. You can invest in various assets on the platform, including thousands of US-listed stocks and ETFs, options, cryptocurrencies, and ADRs (American Depositary Receipts).

Webull has become one of the most popular trading platforms in the US for many reasons. Whether you invest online or through the Webull app, the main interface is simple and easy to use. Newbie investors will find this a great choice.

Webull is also used by people who wish to invest small amounts. The platform enables fractional ownership starting at just $1 per trade. In addition, Webull offers a 100% commission-free brokerage service. That makes it a direct competitor to other no-fee platforms like Robinhood, eToro, and CedarFX.

However, as with Robinhood, Webull charges a monthly subscription fee for Level II market data. The monthly fee is $1.99. In addition, security is assured at Webull, as the broker is registered with the SEC and FINRA and a member of the SIPC.

Webull fees:

Your Money Is At Risk.

3. Robinhood – Based-US Broker To Invest In Stocks

Robinhood, an online broker, based in the US, was founded in 2013 by Vladimir Tenev and Baiju Bhatt. According to their website, the platform aims to “democratize finance for all.” To achieve this goal, it offers commission-free investing and no minimum investment.

A fairly large portfolio of stocks and ETFs offered by Robinhood, all listed on US exchanges (NYSE and NASDAQ). Additionally, stock options and crypto trading markets are available for investment. On top of its fee-free offerings, Robinhood’s greatest advantage is its ease of use.

It takes minutes to sign up and invest in an asset – and no previous experience is needed. As a result, the popularity of Robinhood has grown exponentially in recent years – with over 10 million traders as clients. In addition, it plans to expand into new markets. Robinhood planned to go public later in 2021.

RobinHood fees:

Your Money Is At Risk.

4. TD Ameritrade – One Of The Oldest Brokers To Invest In Stocks

One of the oldest brokerage companies in the US, TD Ameritrade, was founded in 1975. With more than four decades of experience in the investment industry, it should come as no surprise that the platform is now home to 11 million clients. That amounts to over $1 trillion in assets and an average of 500,000 trades per day.

TD Ameritrade stands out not only for its reputation and trustworthiness but also for its vast asset pool. The platform offers thousands of traditional investment products, including stocks, bonds, ETFs, mutual funds, and IPOs.

If you are a short-term trader, trading options, futures, and forex are also available with TD Ameritrade. In addition, TD Ameritrade has since opened up commission-free trading on US-listed stocks and ETFs in response to a plethora of low-cost brokers such as Robinhood and Webull.

It is evident from the number of advanced tools and features that TD Ameritrade’s proprietary ‘thinkorswim’ day trading platform offers that the brokerage is more suited to experienced traders. As a result, TD Ameritrade might not be a good choice if you are a complete newbie to the world of trading.

TD Ameritrade fees:

Your Money Is At Risk.

5. Interactive Brokers – US-Based Free Trading Platform To Invest In Stocks

Founded in 1978, Interactive Brokers is a US-based free trading platform regulated by several financial authorities, including the UK’s Financial Conduct Authority, the US Securities and Exchange Commission, the Commodity Futures Trading Commission, and Hong Kong’s Securities and Futures Commission. It is also a member of the NYSE FINRA SIPC.

Interactive Brokers is regulated by numerous global authorities and listed on NASDAQ under the ticker symbol IBKR with a market capitalization of $28.08 billion. Moreover, since Interactive Brokers is a publicly-traded company and publishes its financial statements, millions of traders view it as a safe trading platform.

Interactive Brokers offers commission-free trades and no account minimums, two of the most attractive features to new and experienced traders. In addition, interactive Brokers offer one of the most extensive product and market offerings out there. This discount broker offers traditional stocks and ETFs, futures, CFDs, and forex trading on a low-cost, commission-free basis, allowing you to diversify your portfolio.

If you want to diversify your investment portfolio, you can invest in stocks listed on international exchanges with Interactive Brokers. In addition, you can also trade and invest in fractional shares of stocks through this free trading platform. In other words, beginners and experienced traders can invest as much money as they want to meet trading objectives and time horizons and diversify their portfolios without calculating how many whole shares they can afford to buy.

Interactive Brokers fees:

Your Money Is At Risk.

6. Fidelity – Classic Platform To Invest In Stocks

Fidelity Fund was founded in 1943 when Edward C. Johnson was appointed president and director. As an investment adviser to Fidelity Fund, Fidelity Management & Research Company was founded three years later.

In addition to facilitating 3.5 million trades daily, Fidelity is home to more than 36 million investors. Fidelity has over 47,000 associates covering nine countries, including the US, North America, Europe, Australia, and Australia.

Fidelity offers commission-free stock trading and US ETFs. In addition, it offers a wide range of advanced research tools, including Active Trader Pro, technical analysis, charting, trading ideas, and technical indicators. Finally, Fidelity offers a range of account types, from standard accounts to Roth IRAs, to meet your trading objectives and needs.

An intuitive, well-designed, interactive web trading platform makes it easy to use. Additionally, the account opening process is fully digital, streamlining the trading process.

Fidelity’s tradable assets include mutual funds, commission-free US stocks and ETFs, fixed income, bonds and CDs, and options. With Fidelity’s robo investing and wealth management services, you can also adopt passive trading strategies.

Fidelity Brokers fees:

Your Money Is At Risk.

Invest in Stocks – Fee Comparison

Best Stocks to Invest In

It is easy to buy a stock, but it is extremely difficult to buy the right stock without a time-tested strategy. So how can you buy the best stocks right now or add them to your watchlist? The top candidates are General Motors (GM), Deere (DE), Hilton Worldwide (HLT), STMicroelectronics (STM), and Cheniere Energy (LNG).

GM Stock

After briefly clearing a 65.28 entry, GM stock is below a buy zone. Last week, GM stock fell 1.9% but held support at its 50-day line, which keeps its latest buy zone in play. The relative strength line for GM stock is experiencing a pause after gathering some momentum. In the near future, it might break the highs from last year. It currently has a 77 out of 99 IBD Composite Rating, which is good but not ideal.

Earnings have been outpacing stock market performance. Over the past year, the stock price has risen around 20%. However, it has a long way to go before it can match the performance of Ford (F). Ford’s market cap has now surpassed GM’s valuation for the first time in a year. The Accumulation/Distribution Rating of C+ reflects recent institutional purchases over sales. Funds hold a total of 47% of its shares.

Deere Stock

The stock of Deere formed a cup and was handled after consolidating for several months at 386.65. However, it recently rebounded above its 50-day and 200-day moving averages with high volume. It demonstrated the tractor stock is sowing the seeds for future success.

After rebounding from key support, its relative strength line surged, but it has some work to do to reach 12-month highs. In terms of stock market performance, its RS Rating is 84 out of 99. Earnings are even better, with its EPS Rating coming in at a near-perfect 97.

 Hilton Stock

At the moment, Hilton is one of the top-performing hotel stocks. However, after breaking out of a cup-with-handle base in late December, it sits just below its buy zone. Its official buy point is 148.85.

A test of the 50-day moving average is underway for HLT stock. An investor may also use a rebound from here as an entry point, but they may want to wait for HLT stock to reclaim its 21-day line and break a short downtrend.

Though earnings have been negatively affected by the Covid-19 pandemic, HLT stock has received a near-perfect Composite Rating of 97-out-of-99.

STMicroelectronics Stock

Over the last eight weeks, shares have formed a flat base. It is trying to break through an ideal buy point of 52.25.

The stock could also provide an early entry if it rises back above its recent high of 50.24. However, STM stock has failed to close above that early entry twice in recent sessions amid market sell-offs.

During recent market turmoil, the stock tested support at the 50-day moving average, and it is now trading around this level.

Cheniere Energy Stock

The Cheniere Energy stock has extended above the trendline entry around 106.60. However, LNG stock is still trading near a recent resistance level near 110. Finally, the shares are hovering around 113.50, a flat-base buy point. That is the third stage.

After recent declines, relative strength is rising again, which is encouraging.

67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

Best Stocks to Invest in the Long-Term

Mastercard Inc. (ticker: MA)

Even though Mastercard’s logo appears on many credit and debit cards, the company neither takes deposits nor extends credit but instead serves as an intermediary that processes payments. Powered by a transaction fee imposed on sellers, Mastercard’s top line moves in lockstep with the broader consumer economy. In the third quarter, revenue grew 30%, and net income increased 46% year over year due to high demand and inflated prices. Along with this traditional business model, buy-now, pay-later systems, and market expansions offer growth opportunities, particularly in traditionally cash-based international markets. As a result, RBC analyst Daniel Perlin believes that MasterCard remains one of the best ideas in the sector, given its strong organic growth potential while providing margin expansion opportunities.

ConocoPhillips (COP)

ConocoPhillips, the third-largest oil company in the United States, tops RBC’s list of long-term stocks to buy. COP has been active in Texas’ Permian Basin, acquiring Royal Dutch Shell’s (RDS.A) Permian properties for $9.5 billion in early December. In addition, due to its acquisition of Concho Resources, another Permian producer, for $13.3 billion in 2020, it demonstrates its commitment to maintaining and expanding its presence in the region. The company’s capital expenditure plan for 2022 targets $7 billion in shareholder returns, including a new “variable return of cash” tier that pays investors a percentage of excess cash flows. According to RBC analyst Scott Hanold, the scaled-up Permian position offers greater free-cash-flow generation, asset diversity, and flexibility in development.

Louisiana-Pacific Corp. (LPX)

According to Realtor.com’s research, the number of homes for sale has dropped 57% since 2019, causing prices to increase as builders struggle to fill the supply gap. As a result, Louisiana-Pacific is well situated to reap the benefits of the 12% increase in new homes starting in November. In addition, LPX, which provides siding, oriented strand board, and engineered wood products, was named Home Depot Inc.’s (HD) merchandising partner of the year for lumber due to its ability to navigate supply shortages. This past year, LPX’s share price has soared more than 90%, its third-quarter revenue grew 53%, and its net income increased 106%. According to RBC analyst Paul Quinn, LPX’s (oriented strand board) and (engineered wood products) businesses will continue to benefit from continued growth in the US housing market, enabling them to return capital to shareholders more easily.

Best Stocks to Invest in the Short-Term

Disney

As a worldwide entertainment company, Disney operates in over 200 countries. The company has a number of segments, such as media networks, parks, resorts, studio entertainment, and direct-to-consumer international. As Morgan Stanley says, Disney has a world-class brand and stands to benefit from the transition from legacy distribution to streaming. The company also has strong growth potential through the Fox assets under its brand, direct-to-consumer business, and earnings per share.

• The target price for Morgan Stanley is $135
• 17% of price target reached
• Since inclusion, the return has been 12.6%

Humana

Based in Louisville, Kentucky, Humana is a for-profit healthcare and health insurance company founded in 1961. In the United States it is the third-largest provider of health insurance.

Morgan Stanley recommends this stock for several reasons. First, the company belongs to the Medicare Advantage market, which grows in the high single digits as the population ages. Second, its main business, health insurance, is expected to grow significantly through 2019 and beyond. Third, the Tax Cuts and Jobs Act passed in 2017 enhanced benefits. Finally, Humana has built strong capital with low leverage and strong capital investments. As a result, Humana is expected to grow EPS by 12% to 15% over the long run, according to Morgan Stanley.

• The target price set by Morgan Stanley is $383.
• The price target is 37% of the current price
• Since inclusion, total return has been -11.3%

IQvia Holdings

The holding company serves both the clinical research and health information technology sectors. In addition, its offices in more than 100 countries provide biopharmaceutical development and commercial outsourcing services.

IQvia has remained on Morgan Stanley’s list for its greater potential growth in what it calls a defensive sector. With the continued digitalization of drug development, IQvia will likely become a leader in research and development (R&D).

• Morgan Stanley’s target price is $156
• Price target percentage: 10%
• The total return since inclusion is 33.9%

67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

How to Build a Good Stocks Investment Portfolio

1. Decide how much help you want

Without building a portfolio from scratch, you can manage your money and invest. Robo-advisors are an inexpensive alternative. They create and manage an investment portfolio based on your risk tolerance and overall goals.

You can build your portfolio and map out a comprehensive financial plan with an online financial planning service or a financial advisor if you want more than just investment management.

2. Select an account that helps you achieve your goals

Several types of investment accounts exist. IRAs are intended to be used for retirement and offer tax advantages when you invest. Regular brokerage accounts are better for non-retirement goals, like a down payment on a house. However, a high-yield savings account may be a better choice if you need money to invest within the next five years. Before choosing an account, determine why you are investing. You can open a brokerage or IRA account online – here are some of our top picks for IRA accounts.

3. Determine the best asset allocation for you

How do you figure out how much of each asset class you need if you plan on investing mostly in mutual funds, a little in bonds, and a little in individual stocks? Your asset allocation is how you divide up your portfolio among different types of assets based on your risk tolerance.

Risks of Stocks Investing

1. Company risk

The most prevalent threat to investors who purchase individual stocks is a company-specific risk. For example, if a company fails to generate enough revenue or profits, you can lose money on your shares.

A company’s market value can be hurt by poor operational performance. Sometimes, companies report great sales and profits, but their growth or outlook isn’t strong enough to meet overly optimistic investors’ expectations.

2. Volatility and market risk

A company’s stock can still be volatile and subject to market risk regardless of its performance. Its price is largely influenced by supply and demand. Stock prices will fall if people are pulling capital out of the stock market in general.

3. Opportunity cost

There is a risk of missing out on something. The opportunity cost refers to the gain you could have gained by choosing a different investment. For example, suppose you buy stock A, and it grows 10%, while stock B grows 15% over the same period, then my net opportunity cost is a 5% difference.

4. Liquidity risk

Liquidity risk gets little attention, but it’s important and intuitive. A liquid asset is easy to exchange for another (typically how fast it can be sold for cash). Cash is considered to be the most liquid asset. Stocks and bonds are also usually considered highly liquid assets. On the other hand, real estate and private business ownership are considered less liquid. Their sale can take a long time. Unexpected cash needs or gains are difficult to realize when assets are illiquid.

Taxes and Regulations Regarding Stocks in the US

If you have had the stock for more than a year, your profit on the sale is taxable at 0%, 15%, or 20%. If you have the stock for less than a year, it is taxable at your ordinary tax rate. In addition, you usually have to pay taxes on dividends received from stock.

Conclusion

Investing in stocks is a great way to build wealth, but if possible, try to reduce the cost of purchase as much as you can. Buying stocks on platforms with no commission is the best way to go about it. In this guide, we explained how to buy stocks online on eToro, as well as other platforms you might want to consider. You now know where to buy stocks, so all you have to do is look up the best stocks to buy right now, and hopefully, make the right call based on your research.

eToro – Buy Stocks With 0% Commission in the US

67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

FAQs

How much to invest in stocks?

How many people are investing in stocks?

Data from the National Stock Exchange (NSE) shows that there are currently 1.2 crore active investors in India, a country with 138 crore people, as of August 2021.

How to invest in stocks?

By using an online stockbroker, you can purchase stocks easily. For example, you can purchase stocks through the broker's website in just a few minutes after opening and funding your account. Another option is to use a full-service broker or buy stock directly.

Can I invest in stocks in a US broker?

Buying stocks online is the easiest way to do so. In a few minutes, you can buy stocks through the broker's website after opening and funding your account. Alternatively, you can use a full-service stockbroker or purchase stock directly from the company.

What is the best US stock to invest in?

You can buy stocks on the platform by creating an eToro account, verifying it, depositing some funds, and searching for stocks. Then, when you click the trade button, the trade window will open for you to fill in the trade details.