5 Investment Strategies For Beginners in 2024 - Newsweek
5 Investment Strategies For Beginners in 2024 · 1. Diversification · 2. Investing in Index Funds · 3. Dollar Cost Averaging · 4. Income ...
buy stocks
You can also diversify your portfolio across different industries and sectors. For example, you can <anchor>buy stocks</anchor> from companies in multiple industries, like healthcare, energy and technology. You can also buy an index fund to achieve instant diversification.
How to Buy Stocks: A Step-by-Step Guide for Beginners
How to Buy Stocks: A Step-by-Step Guide for Beginners

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- [Amex Gold vs. Amex Platinum](https://www.newsweek.com/vault/credit-cards/amex-gold-vs-platinum/)
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- [Capital One Venture X vs. Chase Sapphire Reserve](https://www.newsweek.com/vault/credit-cards/capital-one-venture-x-vs-chase-sapphire-reserve/)
- [Chase Sapphire Preferred vs. Capital One Venture Rewards](https://www.newsweek.com/vault/credit-cards/chase-sapphire-preferred-vs-capital-one-venture/)
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- LLCs

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- Cryptocurrency

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- Investing Guides

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- Taxes

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Credit Cards

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- [Best Cash Back Credit Cards](https://www.newsweek.com/vault/credit-cards/best-cash-back-credit-cards/)
- [Easiest Credit Cards to Get](https://www.newsweek.com/vault/credit-cards/easiest-credit-cards-to-get/)
- [Best Grocery Credit Cards](https://www.newsweek.com/vault/credit-cards/best-grocery-credit-cards/)

- Credit Card Reviews

- [American Express Platinum Review](https://www.newsweek.com/vault/credit-cards/american-express-platinum-review/)
- [American Express Gold Review](https://www.newsweek.com/vault/credit-cards/american-express-gold-card-review/)
- [Capital One Venture X Review](https://www.newsweek.com/vault/credit-cards/capital-one-venture-x-review/)
- [Chase Sapphire Reserve Review](https://www.newsweek.com/vault/credit-cards/chase-sapphire-reserve-review/)
- [Chase Sapphire Preferred Review](https://www.newsweek.com/vault/credit-cards/chase-sapphire-preferred-card-review/)

- Compare Credit Cards

- [Amex Gold vs. Amex Platinum](https://www.newsweek.com/vault/credit-cards/amex-gold-vs-platinum/)
- [Chase Sapphire Preferred vs. Sapphire Reserve](https://www.newsweek.com/vault/credit-cards/chase-sapphire-preferred-vs-chase-sapphire-reserve/)
- [Capital One Venture X vs. Chase Sapphire Reserve](https://www.newsweek.com/vault/credit-cards/capital-one-venture-x-vs-chase-sapphire-reserve/)
- [Chase Sapphire Preferred vs. Capital One Venture Rewards](https://www.newsweek.com/vault/credit-cards/chase-sapphire-preferred-vs-capital-one-venture/)
- [Amex Platinum vs. Chase Sapphire Reserve](https://www.newsweek.com/vault/credit-cards/amex-platinum-vs-chase-sapphire-reserve/)

- Credit Card Guides

- [How To Pick Your First Credit Card](https://www.newsweek.com/vault/credit-cards/first-credit-card-guide/)
- [Guide to Credit Score Ranges](https://www.newsweek.com/vault/credit-cards/credit-score-ranges/)
- [What Is a Good APR for a Credit Card?](https://www.newsweek.com/vault/credit-cards/what-is-a-good-apr-for-a-credit-card/)
- [How Many Credit Cards Should I Have?](https://www.newsweek.com/vault/credit-cards/how-many-credit-cards-should-i-have/)
- [How To Choose a Credit Card](https://www.newsweek.com/vault/credit-cards/how-to-choose-a-credit-card/)

Banking

- Savings Accounts

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- [Best Health Savings Accounts](https://www.newsweek.com/vault/banking/savings/best-health-savings-accounts/)
- [Current Savings Account Rates](https://www.newsweek.com/vault/banking/savings/average-savings-account-rates/)
- [All Savings Articles](https://www.newsweek.com/vault/banking/savings/)

- Checking Accounts

- [Best High-Yield Checking Accounts](https://www.newsweek.com/vault/banking/checking/best-high-yield-checking-accounts/)
- [Best Business Checking Accounts](https://www.newsweek.com/vault/banking/checking/best-business-checking-accounts/)
- [Best No-Fee Checking Accounts](https://www.newsweek.com/vault/banking/checking/best-no-fee-checking-accounts/)
- [Checking vs. Savings Account](https://www.newsweek.com/vault/banking/checking-vs-savings/)
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- CDs

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- [Best Jumbo CD Rates](https://www.newsweek.com/vault/banking/cds/best-jumbo-cd-rates/)
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- [Current CD Rates](https://www.newsweek.com/vault/banking/cds/current-cd-rates/)
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- Banks

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- [Best Bank Account Bonuses](https://www.newsweek.com/vault/banking/best-bank-account-bonuses/)
- [Average Money Market Account Rates](https://www.newsweek.com/vault/banking/current-money-market-account-rates/)
- [Capital One Bank Review](https://www.newsweek.com/vault/banking/capital-one-bank-review/)
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Loans

- Personal Loans

- [Best Personal Loans](https://www.newsweek.com/vault/personal-loans/best-personal-loans/)
- [Easiest Personal Loans to Get](https://www.newsweek.com/vault/personal-loans/easiest-personal-loans-to-get/)
- [Best Debt Consolidation Loans for Bad Credit](https://www.newsweek.com/vault/personal-loans/best-debt-consolidation-loans-for-bad-credit/)
- [Tax Refund Loans](https://www.newsweek.com/vault/personal-loans/tax-refund-loans/)
- [All Personal Loans Articles](https://www.newsweek.com/vault/personal-loans/)

- Student Loans

- [Best Student Loan Rates](https://www.newsweek.com/vault/student-loans/best-student-loan-rates/)
- [Best International Student Loans](https://www.newsweek.com/vault/student-loans/best-international-student-loans/)
- [Best Private Student Loans](https://www.newsweek.com/vault/student-loans/best-private-student-loans/)
- [Best Refinance Student Loans](https://www.newsweek.com/vault/student-loans/best-refinance-student-loans/)
- [All Student Loans Articles](https://www.newsweek.com/vault/student-loans/)

- Business Loans

- [Best Online Business Loans](https://www.newsweek.com/vault/business-loans/best-online-business-loans/)
- [Best Startup Business Loans](https://www.newsweek.com/vault/business-loans/best-startup-business-loans/)
- [Best Business Loans for Veterans](https://www.newsweek.com/vault/business-loans/best-business-loans-for-veterans/)
- [Best Business Lines of Credit](https://www.newsweek.com/vault/business-loans/best-business-lines-of-credit/)
- [All Business Loans Articles](https://www.newsweek.com/vault/business-loans/)

- Auto Loans

- [Best Auto Loan Refinance Lenders](https://www.newsweek.com/vault/auto/loans/best-auto-loan-refinance-lenders/)
- [TD Bank Auto Loan Review](https://www.newsweek.com/vault/auto/loans/td-bank-auto-loan-review/)
- [Wells Fargo Auto Loan Review](https://www.newsweek.com/vault/auto/loans/wells-fargo-auto-loan/)
- [Get a Car Loan With No Down Payment](https://www.newsweek.com/vault/auto/loans/how-to-buy-a-no-downpayment-car-loan/)
- [All Auto Loans Articles](https://www.newsweek.com/vault/auto/loans/)

Small Business

- Software

- [Best Antivirus Software](https://www.newsweek.com/vault/small-business/best-antivirus-software/)
- [Best Free Antivirus Software](https://www.newsweek.com/vault/small-business/best-free-antivirus-software/)
- [Best Accounting Software](https://www.newsweek.com/vault/small-business/best-accounting-software/)
- [Best Project Management Software](https://www.newsweek.com/vault/small-business/best-project-management-software/)
- [Best Video Conferencing Software](https://www.newsweek.com/vault/small-business/best-video-conferencing-software/)

- Website Builders

- [Best Website Builders](https://www.newsweek.com/vault/small-business/best-website-builders/)
- [Cheapest Website Builders](https://www.newsweek.com/vault/small-business/best-cheap-website-builders/)
- [Best Free Blog Sites](https://www.newsweek.com/vault/small-business/best-free-blog-sites/)
- [Best Web Design Services](https://www.newsweek.com/vault/small-business/best-web-design-services/)
- [Best Cloud Hosting Services](https://www.newsweek.com/vault/small-business/best-cloud-hosting-services/)

- LLCs

- [Best LLC Services](https://www.newsweek.com/vault/small-business/best-llc-service/)
- [Best States to Form an LLC](https://www.newsweek.com/vault/small-business/best-states-to-form-an-llc/)
- [How To Set Up an LLC](https://www.newsweek.com/vault/small-business/how-to-set-up-an-llc/)
- [How Much Does It Cost To Start an LLC?](https://www.newsweek.com/vault/small-business/forming-llc-cost/)
- [Sole Proprietorship vs. LLC](https://www.newsweek.com/vault/small-business/sole-proprietorship-vs-llc/)

- VPNs

- [Best VPNs](https://www.newsweek.com/vault/small-business/best-vpn/)
- [Fastest VPNs](https://www.newsweek.com/vault/small-business/fastest-vpns/)
- [Best Cheap VPNs](https://www.newsweek.com/vault/small-business/best-cheap-vpn/)
- [Best Mobile VPN](https://www.newsweek.com/vault/small-business/best-mobile-vpn/)
- [Best VPN for Streaming](https://www.newsweek.com/vault/small-business/best-vpn-for-streaming/)

Investing

- Compare Investments

- [Best Investments](https://www.newsweek.com/vault/investing/best-investments/)
- [Best Investment Apps](https://www.newsweek.com/vault/investing/best-investment-apps/)
- [Best Low-Risk Investments](https://www.newsweek.com/vault/investing/low-risk-investments/)
- [Best Short-Term Investments](https://www.newsweek.com/vault/investing/best-short-term-investments/)
- [Best Investments When Interest Rates Go Down](https://www.newsweek.com/vault/investing/best-investments-when-fed-cuts-interest-rates/)

- Compare Stocks

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# How to Buy Stocks: A Step-by-Step Guide for Beginners

![Jamie Johnson](data:image/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==)

By

[Jamie Johnson](https://www.newsweek.com/vault/authors/jamie-johnson/)

![Jamie Johnson](data:image/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==)

Jamie Johnson

Investing Expert

Jamie Johnson is a Kansas City-based freelance writer. Her work has been featured on several of the top finance and business sites in the country, including Insider, USA Today, Bankrate, Rocket Mortgage, Fox Business, Quicken Loans and The Balance. She covers a variety of personal finance topics including mortgages, loans, credit cards and insurance.

[Read Jamie Johnson's full bio](https://www.newsweek.com/vault/authors/jamie-johnson/)

![Robert Thorpe](data:image/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==)

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[Robert Thorpe](https://www.newsweek.com/vault/authors/robert-thorpe/)

![Robert Thorpe](data:image/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==)

Robert Thorpe

Senior Editor

Robert is a senior editor at Newsweek, specializing in a range of personal finance topics, including credit cards, loans and banking. Prior to Newsweek, he worked at Bankrate as the lead editor for small business loans and as a credit cards writer and editor. He has also written and edited for CreditCards.com, The Points Guy and The Motley Fool Ascent.

[Read Robert Thorpe's full bio](https://www.newsweek.com/vault/authors/robert-thorpe/)

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Updated August 15, 2024 at 7:48 pm

![Closeup - Woman is checking Bitcoin price chart on digital exchange on smartphone, cryptocurrency future price action prediction.](https://www.newsweek.com/vault/wp-content/uploads/2024/01/GettyImages-1323542329.jpg)

![Methodology Icon](data:image/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==)
Our Methodology

Our research is designed to provide you with a comprehensive understanding of personal finance services and products that best suit your needs. To help you in the decision-making process, our expert contributors compare common preferences and potential pain points, such as affordability, accessibility, and credibility.

Think about the companies you love and the products you use regularly. What if you could own a small portion of those companies? When you buy stocks, that’s exactly what you’re doing. Plus, [investing in the stock market](https://www.newsweek.com/vault/investing/stock-investing-top-tips/) is a great way to increase your returns and grow real wealth over time.

Thanks to the many brokers offering fractional investing and zero-commission trading, you can invest in stocks even if you don’t have a lot of money. But it’s helpful to know where to buy stocks and how to invest in the stock market before you begin.

## Vault’s Viewpoint on Buying Stocks

- [Investing in stocks can help you diversify your income and outpace inflation](https://www.newsweek.com/vault/investing/how-to-find-the-best-stocks-for-inflation/).
- You can get started investing without a lot of money.
- Online brokerage platforms make picking your stocks and growing your portfolio easy.

## Benefits of Investing in Stocks

Here are the five biggest reasons you should consider investing in the stock market:

- **Start small:** Thanks to the increase in online brokerage tools, you can invest in stocks without a lot of money.
- **Chance to earn higher returns:** Most people buy stocks because the returns are significantly higher than what you’d receive by putting money away in a savings account or investing in a [certificate of deposit](https://www.newsweek.com/vault/banking/cds/best-cd-rates/) (CD). The stock market has its ups and downs, but the S&P 500 has returned between 8% and 12% annually.
- **Outpace inflation:** Investing in stocks for the long term can lead to returns that outpace inflation.
- **Earn passive income:** If you invest in a company that pays dividends, like IBM or Caterpillar, you’ll receive quarterly payments which can help supplement your income.
- **Diversify your income:** When you invest in multiple companies across different sectors, you can help reduce the risk and volatility of your investment portfolio.

## How to Buy Stocks

If you’re ready to start setting money aside for long-term investments, here are six steps you’ll take to get started buying stocks.

### Open a Brokerage Account

Before you can purchase stocks, you need to open a brokerage account. Many of the best online brokers provide commission-free trading and don’t require a minimum balance to open an account.

As you’re researching different brokers, consider the different features offered and how user-friendly the platform is. New investors will probably want to choose an online broker that caters to beginners, like Robinhood or [E-Trade](https://www.newsweek.com/vault/banking/cds/e-trade-cd-rates/).

Once you’ve selected the company you want, you’ll have to complete a new account application. Online brokers will need the following information to comply with federal regulations:

- Name
- Social Security Number
- Date of birth
- Address
- Phone number
- Driver’s license or passport
- Occupation
- Whether you’re employed by a brokerage firm
- Yearly income
- Net worth
- Level of risk you’re comfortable with

Once the account is open, you can fund it by making a transfer from your checking or [savings account](https://www.newsweek.com/vault/banking/savings/best-savings-accounts/). From there, you’re ready to choose which stocks you’ll invest in.

### Choose Your Stocks

Once you’ve funded your brokerage account, it’s time to pick which stocks you want to buy. If you aren’t sure, you may want to spend some time researching different companies first.

Make a list of potential companies you want to invest in and check out their annual reports, SEC filings and quarterly earnings updates. This information will help you evaluate the financial strength of different businesses.

Once you purchase your stocks, it’s best to follow a buy-and-hold strategy, which means you only purchase stocks you plan to keep for the long haul.

> “If you choose to buy stocks, it’s best to adopt a buy-and-hold strategy to buy wealth over time. This strategy helps you avoid selling based on emotion and prevents you from missing out on the market’s best days.”
>
> — Jamie Johnson

### Decide How Many Shares You Want

Next, you need to decide how much money you’re willing to invest. From there, you can divide that number by the price of the stock. For example, let’s say you want to invest $1,000 into Amazon.

You’ll divide that number by the current price of the stock which will tell you how many shares you can afford. If your online brokerage offers fractional shares, you can purchase portions of stocks, which is especially helpful if you don’t have enough money to purchase a full share.

### Choose Your Order Type

There are two order types every investor needs to know about: market orders and limit orders. A market order is the most basic trade since it buys the stock immediately at the best price available.

But the last-traded price is not necessarily the price you’ll pay for the stock. The market moves quickly so your order will usually be slightly different than the quote you received. That means you could end up paying more or less money than you were planning on.

A limit order is an order to buy a stock at a specific price or lower. A limit order isn’t guaranteed since the order can’t be placed if the price exceeds the amount you specified. But limit orders are a good way to ensure you don’t spend beyond a certain price.

### Place Your Order

To place an order, you’ll log into your brokerage account and select the account you want to trade in. Then you’ll choose the ticker symbol, which is a short combination of letters or numbers representing that company on the stock exchange. For example, Amazon is listed on the NASDAQ, and its ticker symbol is AMZN.

From there, you’ll select “buy” and enter either the dollar amount you want to spend or the number of shares you want to purchase. Once you submit your order, it will typically be executed quickly and you’ll be notified of your stock ownership.

### Start Building Your Portfolio

Now that you understand how the process works, you can build your portfolio. Continue to add money to your brokerage account and decide if you want to purchase more stock in companies you already invest in or invest in new companies.

Don’t make the mistake of monitoring your portfolio too closely or panicking as soon as you hit a rough patch. Knowing when to sell stocks is just as important as picking the right stocks to invest in. Every investor experiences ups and downs and it’s important to maintain a long-term mindset. And it’s smart to diversify your portfolio by investing in other assets, like mutual funds or a retirement account.

## Online Brokers vs. Full-Service Brokerages

Many new investors wonder whether they should use an online broker or full-service brokerage. With an online broker, you typically pick your own stocks and manage your portfolio on your own or with the help of a robo-advisor. In comparison, a full-service brokerage employs professional advisors who track and manage your portfolio for you.

The following table outlines the biggest differences between the two:

**Online broker****Full-service brokerage**ServicesMostly self-directed brokerage accounts.Trade execution, personalized financial advice and resources and ongoing portfolio management.CostTypically comes with commission-free trading, low fees and no account minimums.You can expect to pay between 1% and 2% annually for the total assets being managed.Financial adviceSome online brokers provide market insights and online resources.You’ll work with an experienced broker who will provide personalized financial advice.Best forNew investors without a lot of capital to invest or investors who are comfortable managing their portfolio on their own.High net worth individuals or investors with complex financial situations.

### Frequently Asked Questions

#### Can I Buy Stocks With $100?

Yes, it’s possible to purchase shares in a company with only $100. Many online investment accounts have $0 account minimums and commission-free trading, making it easier for you to put as much money as possible toward investment goals. You can even purchase fractional shares of stocks, which allows you to buy portions of a stock.

#### How Much Should a Beginner Put in Stocks?

Some online brokerages make it possible to get started investing with as little as $5. The exact amount you invest will depend on your risk tolerance and financial situation.

#### What Are Some Cheap Stocks To Buy?

It’s not a good idea to invest in stocks solely based on the price since the price doesn’t tell you anything about the company. Instead, start by researching different companies and selecting a few that you want to be a long-term investor in. From there, you can figure out how much money you have to invest.

## More From the Vault: Guide To Investing in Stocks

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**Editorial Note:** Opinions expressed here are author’s alone, not those of any bank, credit card issuer, hotel, airline or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post. We may earn a commission from partner links on Newsweek, but commissions do not affect our editors’ opinions or evaluations.

![Jamie Johnson](data:image/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==)

Jamie Johnson

Investing Expert

Jamie Johnson is a Kansas City-based freelance writer. Her work has been featured on several of the top finance and business sites in the country, including Insider, USA Today, Bankrate, Rocket Mortgage, Fox Business, Quicken Loans and The Balance. She covers a variety of personal finance topics including mortgages, loans, credit cards and insurance.

[Read more articles by Jamie Johnson](https://www.newsweek.com/vault/authors/jamie-johnson/)

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