How to Buy Stocks: Investing for Beginners Series #2 // How do I buy stocks? with David Moadel
welcome to looking at the markets with David Modell this is part of a beginner
series for people who want to get started with investing or trading stocks
and other investments and today we're going to talk about how do you buy
stocks how do you buy shares of stock to be more specific and if you by the way
want more help with all of this with you know stocks you know trading investing
how to buy stocks picking out stocks to buy things like that and putting
together an investing plan which you definitely want to have if you're going
to invest successfully my name is David Modell and you can email me at that
email address down there it is David Modell @ gmail.com alright so how do you
buy stocks or how do you buy shares of stock well what you need to do you can't
you can't just go anywhere you can't just walk into any store and buy shares
of stock alright if you work for a company that offers shares of stock then
sometimes you can buy the company's stock directly from the company okay
that is possible if you work at a company or if you have connections with
that company sometimes you can do that sometimes you can buy what's called
preferred stock which is kind of an exclusive stock and it offers a lot of
times it offers better dividends or you get divot you get paid dividends first
if the stock is liquidated or they get rid of the stock people with preferred
shares of stock usually tend to get paid first before people with common shares
but that's that's a whole separate thing all right
in most cases you're gonna probably be buying common stock which just about
anybody can buy who can afford it alright so common stock is just normal
shares of stock on companies like you know the ones that you know about
probably Apple Amazon Netflix coca-cola Disney ExxonMobil JPMorgan so
and so forth all right there are many many stocks there are over 5,000 stocks
on the New York Stock Exchange so there are plenty to choose from when you're
first starting out you might just want to start with the the more famous ones
like I mentioned but that's up to you all right you have to make your own
decisions of course so how do you do it well first of all you're probably going
to want to have a bank account of some sort that's usually where you start such
as with Bank of America maybe a checking or savings account or Wells Fargo
something like that all right there are many banks out there I'm not
going to tell you which bank to use but those are just a few examples all right
so you've set up a bank account and you probably want to put some money in there
okay how much money you start with is up to
you I recommend at least $500 try to save up $500 if you can if you can save
up a couple thousand that's even better you'll be in a better position but if
you can save up at least at least 500 is highly recommended so put that in your
bank account and then you have to open up a broker a brokerage account all
right with a broker some brokers and again I'm not going to recommend one
over the other right now but just some of the more well-known
ones will be e trade TD Ameritrade Interactive Brokers Merrill edge Schwab
fidelity Ally these are just a few tradestation there are a whole bunch of
them alright and so you can look those up on Google or wherever look on a
search engine and you can call them or you can you know contact them and shop
around find a broker that has certain things that I look for when I choose a
broker first of all I'm looking for great customer service if you look on
the website of e Trade or fidelity or Schwab or whoever and you call the
number how friendly is the customer service what kind of customer service do
they have do they do they even have customer service on the phone or do you
have to just do it on the web or email or through a chat on the web
personally I like it when they have foam customer service available what are the
hours what are the days is the customer service available 24/7 or is it just
during trading hours like Monday through Friday
you know from eight o'clock to five o'clock or something like that
what are the hours because personally I like for the customer service to be
available as much as possible okay you also want to look at factors when you
choose a brokerage account or choose a broker you want to look at their website
do they have a good platform as they say okay do they have charts available is it
easy to use is it easy to use their software do they have software available
for charts and things like that and for trading and investing and is it any good
is it fast you don't want you know you don't want a website that's slow if you
can help it all right other things you want to look at our trade execution and
I know that's that's more advanced a more advanced concept but you know you
definitely want to get with a broker that if you place an order for them to
buy shares of stock or sell them you want them to do it quickly and at a good
price not slowly you don't want them to take a
long time to execute your order because prices move okay and time is of the
essence it's time-sensitive with these things all right and you want them to
get it at a good price all right to execute or fill your order
at a good price I know it's more complicated but these are things I look
for just to give you an idea so and you can have more than one brokerage account
okay you can sign up for an account at Schwab and an account at e Trade and an
account at TD Ameritrade you can have more than one don't worry about hurting
their feelings it's okay that way you'll have several brokers available to you
and if you don't like one broker if you get sick and tired of them you just
don't like them anymore you can easily switch your money to another broker now
there might be fees involved in switching brokers okay so be aware of
that be you know check the fees that's another thing I look
by the way what are the fees with the broker do they have a lot of fees do
they charge you for opening an account they probably shouldn't most of them
don't but if they do that's something you want to be aware of do they charge
fees for moving your funds to other brokers a lot of them do things like
that all right so beware definitely be a smart shopper when you shop around for a
broker be picky choose the best ones and again it's okay to have more than one
brokerage account then when you choose your favorite brokerage account you open
it open up an account with them and then you have to transfer the funds the money
from your bank account whether it's Bank of America Wells Fargo City Citibank
Citigroup whatever and then transfer those funds from your bank account
checking her savings or whatever or it could be a retirement account okay could
be an IRA that kind of thing 401 K whatever but you know you can put it in
an IRA if you want to and then transfer the funds over to e trade TD Ameritrade
Schwab fidelity whatever whatever brokerage you're choosing to put your
money into and it takes time understand that it's a process it's probably not
going to happen very not going to happen instantaneously all right all these
processes usually take a few days maybe even a couple weeks so be patient with
it it takes time okay but you don't have to
be too patient with it if it takes them forever
if it takes them weeks and weeks and weeks and things are you know there are
problems that's something to consider when it comes to choosing a broker
whether you know they have reasonable customer service that can guide you
through the process quickly and efficiently alright so that's how you
get started then once you have your brokerage account and it's funded with
money you have the funds in there then now it's different for every broker but
they you can call their customer service again this is why I prefer brokers that
have phone customer service and not just chat online that are email that kind of
thing and they can walk you through the process of buying shares of stock and
you can only buy shares of stock you can afford for example if Amazon
stock is selling for $1,600 per share and you only have $500 in your account
and there's nothing wrong with that but if you if you have $500 in your in your
investing or trading account then you cannot buy shares of Amazon stock which
costs let's say $1600 each per share all right so you can only buy shares of
stock that you can afford to buy also be aware that you're probably also going to
pay commissions you're going to basically pay a fee to buy shares of
stock and then you're probably going to pay Commission Commission's to sell that
stock there are exceptions like Robin Hood you know Robin Hood is supposedly
free stock trading okay so but be careful you know some people say you
know some people like Robin Hood some people are not into it
so more I would say more important than saving five dollars or seven dollars to
buy and sell a stock more important than that is great customer service a great
platform you know great trade execution things like that that's probably to me
more important than just saving a little bit a little bit of money here and there
on the Commission's but that's just my my take on it if you like Robin Hood
great you know by all means feel free to use that if you want to all right and
there might be other fees involved the SEC Securities and Exchange Commission
might charge a small fee for your transactions all right
so check out look into and ask about fees what fees are there for buying and
selling stocks also check to see if there is what's called an inactivity fee
all right so you know some brokers some brokerages might charge you if you start
an account with them open up an account and you don't use it for six months or a
year they might charge you money for that just for being inactive with that
account so be aware of these things ask questions ask about what are the fees is
there an inactivity fee what are you charged to buy and sell or trade stocks
shares of stock all right if I want to transfer my
or close my account or move my IRA over what are the fees for that ask those
questions all right and then generally speaking you'll go on to either their
software you know the trading platform or or just
onto the website or the app if it's Robinhood it's probably going to be on
your phone so it might be an app that you'll go on to and and there will be a
screen there some sort of screen where you can buy or sell if you already own
them shares of stock and you know it'll give you you know hopefully it'll give
you an indication of what you would be paying how much what the fees are what
the Commission's are and then you can make your decision before you execute or
fill your order okay or before they they execute or fill it all right so be
careful know what you're buying what you're selling know what the fees are
gonna be make sure you're happy with the customer service and the trade execution
make sure that they you know actually execute or fill your order quickly and
at a good price and do your own due diligence do your research it's okay to
have more than one broker and you know just know what you're doing
all right don't just trust anybody except in the end you have to trust
yourself and do your own research on all these things all right so I hope this
was helpful to you again every brokerage account has different ways of buying and
selling stocks and shares of stock it's going to look different for every one of
them so you have to talk to their customer service have them walk you
through it walk you through the process if they're not willing to do that then
you might want to choose another broker all right so my name is David Modell
this was an introduction on how to buy stocks how to buy shares of stock if you
have any questions and you want some help with things like this trading
investing stock s-- putting together a plan you can email me at that email
address David Modell at gmail.com if you like this video please give it a thumbs
up on YouTube and leave a comment and subscribe to my youtube channel and hit
that bell on youtube so you can receive the latest updates on my financial
educational videos thank you so much for watching and listening and I'll talk to
you again soon
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