How to Invest in Stocks in 2020

Know everything about buying and investing in stocks in 2020.
Maggie Smith
Author: Maggie Smith
Last Updated: March 27, 2020

You may have heard a lot about a company and be keen to invest in it, but where do you start?

Thanks to online stock brokers, buying and selling stocks online has never been easier. However, for beginners, it may be a confusing process.

If you’ve never bought a stock before, it can be difficult to know where to start and what to look out for when buying shares online.

This step-by-step guide will explain how to buy stocks for beginners and allow you to start buying and selling stocks easily.

We will also explain when to buy a stock, where to buy it, and how to get the most out of your online stock purchase.

On this Page:

    Want to buy stocks now?

    Follow our quick guide below if you are ready to buy stocks today.

    1. Sign up to Ally Invest
    2. Fund your stock trading account
    3. Select the stock you want to purchase
    4. Decide on the number of stocks you want to buy and your order type
    5. Place your order
    6. You now own stocks

    How to buy stocks online: beginner-friendly tutorial

    In this day and age, buying stocks is easily done through an online stockbroker.

    An online stock broker acts as the middleman between buyers and sellers of stocks, bonds, ETFs, and other investment securities.

    The share or investment broker is paid a broker commission and makes money on the spread between the bid and ask price of a stock.

    It is also now widespread for online brokers to offer stock trading apps allowing you to invest in stocks from your smartphone.

    Opening a stockbroker account is a quick process that takes no more than 5 minutes. The stockbroker you choose will require a few details from you, such as proof of identification and your details.

    You will then have to fund your account and from then, buying the stock of your choice is straightforward. If you are interested in stocks with a high upside potential even with small investment amounts, you should consider trading penny stocks as well.

    We have illustrated below a quick step-by-step to buying stocks through one of our recommended stockbrokers, Ally Invest.

    Step 1: Open your stock broker account

    How to Invest in...

    Firstly, open your account with Ally Invest by clicking here. You will then be asked to fill in your basic account information and answer brief questions about your income and risk tolerance.

    Step 2: Fund your stock trading account

    How to Invest in...

    After registration, the stockbroker of your choice will typically require you to fund your account to buy stocks, including giants such as Amazon and Google.

    Your Ally Invest account can be funded directly from your bank account, which makes it easy and straightforward. All you have to do is select the bank and login to authorize the sale.

    Step 3: Select the stock you want to buy

    How to Invest in...

    It is now time to select the stock you want to buy.

    If you have a stock in mind, it should make the process much easier. Most investment brokers will have a search function where you can enter the stock name and make your purchase.

    If you’re not yet sure about which stock you want to buy, we recommend that you look for a broker with a good range of analytical tools and data. Analyzing the stock markets will help you to spot opportunities and make a wise investment.

    We recommend a stockbroker with a good set of educational tools, as this may help you to understand what makes a stock a strong buy. Ally Invest provides company quarterly/ annual financial reports, also known as SEC filings on the most extensive stocks, which are a good indication of the up and coming stocks that could generate high returns.

    When you’ve selected the stock of your choice, simply click on “Buy” and follow the next step. Don’t worry – your account won’t be debited yet.

    Step 4: Decide on the number of stocks you want to purchase and your order type

    How to Invest in...Your Ally Invest trading screen will then display the Bid and Ask price.

    The bid price is the highest price that a buyer is willing to pay for that stock. The ask price is the price that sellers are willing to take for it. If you are selling a stock, you are going to get the bid price, if you are buying a stock you are going to get the ask price. The difference (or “spread”) goes to the broker/specialist that handles the transaction.

    Choose whether you want to buy or sell the stock, the type of order and the number of shares you want to buy then move on to step 5.

    Step 5: Place your order

    How to Invest in...

    You must then click on “Preview order” and confirm. Your buy order will then be executed and you should now hold the shares in your stock trading account.

    How to Buy Stocks For Cheap

    If you’re worried about commissions, rest assured – many sites offer stock trading with very low fees starting at $0. The following 5 stock brokers are reputable sites where you can buy stocks for cheap.

    Interactive Brokers

    How to Invest in...

    Account minimum: $0

    Fees: $0.05 per share

    • Low fees and commissions
    • Wide selections of markets and products
    •  Great customer support
    •  Large selection of research tools
    •  Regulated and trustworthy broker
    • Limited selection of withdrawal methods
    • Complicated pricing model
    • Charges inactivity fees


    How to Invest in...

    Account mininum : $0

    Fees: $0

    • A free stock trading site
    • Robinhood’s mobile application and web-based platforms are user-friendly and easy-to-use.
    • No deposit minimum requirements
    • No hidden fees
    • Regulated broker
    • Not possible to short stocks
    • Basic charts
    • A limited selection of account types
    • No phone or live chat
    • No demo account
    • Available only for residents in the United and Australia


    How to Invest in...

    Account minimum : $0

    Fees: $5 stock trades and $1 on options trades

    • Low trading fees
    • Advanced trading platforms and trading tools
    • Great customer service
    • No hidden fees, no inactivity fees
    • Regulated broker
    • Covers only the US market
    • Charges withdrawal fees
    • Confusing pricing model


    How to Invest in...

    Account minimum : $500
    Fees: $3 per trade

    • Low trading fees
    • Available for international investors
    • Great customer service
    • Stable web-based trading platform
    • Easy-to-use trading platform
    • Offers automated trading
    • Regulated broker
    • Limited educational materials
    • Limited news and market data
    • No commission-free ETFs


    How to Invest in...

    Account minimum : $10,000

    Fees: $4.50 per stock trade

    • Low trading fees
    • Great trading tools
    • Advanced trading technology
    • A wide selection of markets and products
    • Offers informative education section
    • Strict requirements to open a trading account
    • Not suitable for beginners
    • High minimum deposit

    How to Buy Stocks with Credit Card

    Generally speaking, most stock brokers will not allow you to purchase stock using a credit card.

    As you know, to buy and invest in stocks easily, stock market investors tend to go through online stock brokers.

    During account opening and funding, you will be able to fund your stock trading account through an initial deposit. This is generally in the form of a bank transfer.

    Therefore, you can absolutely buy stocks with a debit card, but most brokers will not allow credit card purchases when it comes to buying stocks.

    The reason most brokers won’t allow this is because there are policies in place in order to protect investors from investing more than they can afford.

    Buying stocks with a credit card can also hurt your credit score, which can take years to recuperate.

    However, if you are desperate to buy stocks with a credit card, there are a few loopholes you can explore. These options are:

      • Discount stocks – Some brokers offer to purchase discounted stocks with a credit card. Although it sounds appealing, it might be risky as you trade on margin.
      • Get a cash advance to purchase shares – Online brokers also offer cash advance if you buy stocks with a credit card. You get a loan from the broker with a specific date you must pay back the loan.
      • Balance transfer cards – A balance transfer card allows you to transfer high-interest debt from one credit card to another card with a lower interest rate. Once you can approve you have a balance transfer card, you can avoid the high-interest rates charged by brokers.

      The disadvantages of buying stocks with credit card

      • Fees – In general, credit card fees are high. Online brokers charge additional high fees for deposits and withdrawals through credit cards.
      • Interest – If you have a credit card debt, you will eventually have to pay high rates for the credit card issuer.
      • Risk – If you trade with a credit card, you borrow funds from your account. That might be extremely risky as you can end up owing money to your bank. If you do, use stop loss and limit order to avoid debt in your trading account.

    Should I invest in stocks?

    There are good reasons to invest in stocks, but hedge funds are returning 10–15% annually, so why not invest in hedge funds instead?

    Stocks are an attractive investment because, among all investment securities, stocks have the best risk-return trade-off.

    An investor who takes higher risk expects to be rewarded with higher returns whereas lower-risk investments have lower potential returns. Both stocks and hedge funds have historically delivered around 10 percent returns but the stock investor takes the much lower risk for every $1 of returns.

    While both investments earn 10 percent returns, the hedge fund has a beta* of 5 versus 1 for stocks.

    Asset Beta 10-year Return

    • Hedge Funds 5.00 10–15%
      Stocks 1.00 10.5%
      Bonds 1.00 2.7%

    Simply put, stocks have the best risk-return trade-off among investment choices. This makes stocks one of the best investments.

    *Beta is a measure of price volatility. The market beta is one. Hedge funds are 5 times more volatile than the overall market.

    Understanding the power of compound annual returns: Investors who reinvest their money compound their returns. The 10-year S&P 500 return is 12.3 percent without dividends reinvested. With  reinvestment, the return is 14.6 percent, or on a $10,000 investment over 10 years, an additional investment gain of $7,169.74 ($39,070.25 – $31,900.51).

    How to identify a good stock to buy

    which stock to buy

    If you’re interested in buying stocks, but you are wondering which stock to buy, we strongly recommend good old-fashioned stock analysis.

    Buying stocks on a hunch or gut instinct is likely to turn into a money-losing investment venture. The best way to find strong buys is by conducting fundamental stock analysis, analyzing the following 14 criteria.

    Earnings per share (EPS)
    Tells you how much the company is earning for each share you own. An increasing EPS is an indication the company’s profitability is improving.
    Net earnings/Number of shares issued
    Companies don’t generally share the number of shares issues since it’s a hard number to nail down, however larger companies tend to require more capital to fund their business so are likely to issue more shares than smaller ones. You can estimate a company’s number of stocks by dividing their company value by the stock price.
    Price-to-earnings ratio (P/E)
    Is a handy metric for comparing whether the price of a stock is cheap or expensive relative to its peers.
    Share price/Earnings per share
    The price of a single share of a number of saleable stocks of a company.
    Price/earnings to growth (PEG)
    Takes into consideration the future earnings growth potential of the company. Forecasted estimates are used for future earnings. Compare this figure to analyst estimates.
    P/E ratio / Earnings growth for period X
    The P/E shows whether a company’s stock price is overvalued or undervalued.
    Earnings before interest, taxes, depreciation, and amortization reveals how profitable a company is before accounting deductions.
    Book value (BV)
    The value of a company after all assets are sold and liabilities paid back. Value investors use it to determine the intrinsic value of a company.
    Total assets/Total liabilities
    A successful company should have more assets than liabilities, meaning the assets it owns can provide more benefits than the company’s obligations. A company whose liabilities exceed its assets is probably in trouble, and it would be wiser not to invest in it.
    Market value
    Is based on the value the market places on a stock, which is determined by supply and demand.
    Current market price X Outstanding shares
    A company can be enjoying increasing profitability but not be operating effectively.  It may have healthy earnings growth and solid book value, but no cash to pay its suppliers tomorrow. Here are some ratios to analyze the cash position of a company.
    Price-to-cash flow (P/CF)
    Is an indication of how much operating cash a company is generating. It is an important metric for pre-profitability companies without earnings figures. Large cash expenditures, such as share buybacks or acquisitions can affect the cash liquidity of a company. Current share price / Cash + Cash equivalents.
    Current ratio)
    One of two key liquidity ratios, it measures the company’s ability to pay short-term debt with short-term assets such as cash and receivables.

    Quick ratio
    Called the acid test, this ratio includes assets that can be converted to cash within 90 days.

    When to buy a stock

    That is ‘the question’. There are many factors to consider before you purchase a particular stock. For example, the timing of buying a stock depends on your investment/trading strategy.

    There are four trading/investment strategies: long-term trading, swing, day-trading, and scalp trading.

    If you are a long-term investor, the exact time is not as important as a scalp trader, which must take into consideration small price fluctuations. So, before you start trading, you should identify your trading/investing strategy.

    Other factors to consider before you buy a stock:

    • Economic data – Economic data releases such as Gross Domestic Product (GDP), CPI, interest rates announcement, etc., can affect market sentiment and companies’ earnings.
    • Company earnings report – Every public company report a quarterly earnings report which includes net income, earnings per share (EPS), forecast, and net sales
    • Company dividends –  A company can pay its shareholders a dividend if a profit has been made. As a result, the stock’s price will change.
    • Technical analysis – Technical analysis is a trading method to evaluate financial instruments’ prices and identify trading opportunities based on charts and technical indicators.
    • Stock’s market volume – Every stock has a volume, which represents the number of traded shares during a specific period.

    When to sell a stock

    While buying a stock is the easy part of a transaction, selling a stock is more difficult as it triggers an emotional reaction.

    When you sell a stock, in profit or loss, you take a hard decision, and usually, even when you sell the stock in profit, you might be disappointed. That is a significant part of trading.

    Easy said than done, but here are two tips for selling a stock at the right time that might help you:

    • When the trend goes against you, sell the stock.
    • When the tend goes with you, hold it until the trend changes.

    Other factors to consider before you sell a stock:

    • Company’s financial status
    • Economic slowdown
    • Company’s reports
    • Seasonality in the stock market

    Top 10 stocks to buy in 2020

    Well, some companies are immune to financial crises and economic slowdown more than others.

    The following stocks are blue-chip companies with high market-cap, solid revenues, and a stable income.

    • The Vanguard Total Stock Market ETF  (VTI) –  Sales growth is estimated at 33.10% (2020)
    • Amazon.com (AMZN) – Sales growth is estimated at 18.8% (2020)
    • Facebook (FB) – Sales growth is estimated at 21.30% (2020)
    • Axon Enterprises (AAXN) – Sales growth is estimated at 17.20% (2020)
    • AT&T (T) – Sales growth is estimated at 0.20% (2020)
    • Chipotle Mexican Grill, Inc. (CMG) – Sales growth is estimated at 12.10% (2020)
    • Ciena Corporation (CIEN) – Sales growth is estimated at 7.20%
    • Starbucks Corporation (SBUX) – Sales growth is estimated at 7.60%
    • Brookfield Asset Management (BAM) – Sales growth is estimated at -1.50%
    • Enbridge Incorporated (ENB) – Sales growth is estimated at 5.50%

    How are stocks valued?

    Pre-IPO pricing

    They determine the IPO price by analyzing the:

    • Company’s private financial information- Level of investor demand
    • Traded price in the private market

    The opening up of pre-IPO share trading to retail traders is allowing more accurate IPO pricing to be set.

    Uber is an example of a company whose pre-IPO shares were available to retail traders through online brokers.

    Before the IPO, the stock was valued at $76 billion, which became the IPO price. In May, the IPO was priced at $45 a share, or $75.5 billion – the fourth-largest IPO in US history.

    Public stock pricing

    On the day of the IPO, the price declined 8 percent. Once a stock is public, the price is determined by investor supply and demand.

    Volume is one indicator of market demand. Ten days after the IPO, the stock was trading between $40 and $42, and the company was valued just under $70 billion, indicating that seller trade volume was slightly heavier than buyer trade volume.

    How much capital do I need to start investing in stocks?

    Fractional shares have significantly lowered the minimum investment amount. A fractional share is one share divided into smaller components or fractions.

    These fractions are sold as separate securities. ETFs have also lowered minimum investments. Because they pool investor funds and do not have high management fees, the issuer can set any amount minimum to invest in a fund.

    This means that although online broker minimum deposits vary, you don’t need to have a large amount of capital to start investing in stocks. You can invest in stocks on Robinhood with as little as $5 and in M1 Finance with just $10.

    Premium brokers, on the other hand, may require that you have not only a high minimum account balance but also meet an asset test (e.g., minimum assets of $25,000).

    How much money can I make from stocks?

    How to Invest in...

    Although past performance is never a guarantee of future performance, the historical performance of a security can be, but is not always, a reliable predictor of future performance.

    A stock with low volatility (a large-cap value stock) is more likely to replicate past performance than a stock with high price volatility (a small-cap growth stock).

    The S&P 500 index provides a good benchmark for a diversified stock portfolio. As mentioned, since 1957, the S&P 500 has earned an annual average return of 10 percent. This means that if you invest $10,000 in the S&P 500 index, you can potentially earn $1,000 per year.

    More predictable is the dividend payments a stock will pay. Dividends are the regular distribution of the profits of a company to stock traders. Dividends may be paid out monthly, quarterly, or biannually.

    The investor may accept cash dividend payments or reinvest dividends and benefit from the power of compound annual returns. Companies with steadily increasing and reliable dividend payments have historically outperformed the market.

    Centrica (CNA), a British utility company, is one of the highest dividend yield stocks.

    It pays semi-annual dividends at 8.65%. Another example is Marks & Spencer Group (MKS), which pays semi-annual dividends with a dividend yield of 5.96%. This means that if you invest $10,000, you could be earning up to $596 twice a year.

    How much will I get taxed buying stocks?

    If you hold a stock for more than a year, you will be liable to pay capital gains tax. Capital gains are the profit you make from the sale of investments, such as stocks and real estate. Your tax bracket determines the amount you will pay.

    Short-Term Capital GainsLong-term Capital GainsCapital Losses
    For stocks held for less than a year, you will be taxed at your ordinary tax rate on any capital gains.
    Taxes range from 0 percent if your income is under $39,375 to 20 percent of your income is more than $434,551.
    Any capital losses can be used to offset capital gains. If your capital loss is $2,000 and your capital gain $1,000, you only need to pay tax on the $1,000. Capital gains on stocks held in an IRA or other tax-advantaged account are not taxed.

    Stock tax varies a lot from country to country. An example is Sweden where you pay 30% – Finanso.se 

    Pros of investing in stocks

    Stocks are the most traded investment security for a number of reasons.

    • Compound annual returns
    • An attractive risk-return tradeoff
    • High liquidity
    • Diversification
    • Fractional trading
    • Low fee online stock trading

    Cons of investing in stocks

    The biggest risk an investor faces when investing in the stock market is the loss of capital.

    Also called investment risk, it is the risk the price of a security will fall, and you will have to sell it at a lower price than what you paid for it.

    The best way to manage the loss of capital risk is to manage risks prudently. The following are major stock investing risks and how to evaluate them:

    • Volatility – Stock prices constantly fluctuate. Beta is a measure of a security’s volatility relative to the whole market. This metric is provided in many stock profiles.
    • Credit risk – Bond investors face the risk of default if a bond issuer cannot make interest rate payments. Risk is measured by credit ratings ranging from AAA for investment grade to BBB- and lower for non-investment grade bonds, also called junk bonds.
    • Country risk – Countries receive sovereign ratings. These are issued by the major credit rating agencies. Emerging markets are especially vulnerable to geopolitical risk.
    • Counterparty risk – On an online trading platform, the broker is your counterparty. Trade with licensed and insured brokers. SIPC insurance will cover your investment loss up to $500,000 in the event the broker goes out of business.
    • Leverage – Brokers will specify how much you can borrow beyond your account balance. Though a broker may offer 1:100 leverage, a non-expert investor should never use this high leverage.
    • Currency risk – Foreign stock trades are subject to currency translation fees. If you buy UK stocks with US dollars and the USD depreciates, you will pay more for the stock.
    • Liquidity – If there are not enough buyers or sellers of a stock, you may have to pay a higher price to buy or sell at a lower price. In the worst-case scenario, there will be no counterparty to trade with. Monitor the trade volume in the security you want to trade.
    • Interest rate risk – When interest rates rise, the value of fixed-income securities tends to decline, and vice versa. When interest rates fall, investors will sell stocks and buy higher returning bonds.
    • Market risk – Investors have little control over market risk. Factors that have recently affected the stock markets include the US-China trade war, a drop in oil prices, and a flash crash caused by program trading.

    Glossary of Investment Terms


    A bond is a loan made to an organization or government with the guarantee that the borrower will pay back the loan plus interest upon the maturity of the loan term. It can be advanced to the national government, corporate institutions, and city administration. It is an investment class with a fixed income and a predetermined loan term.

    Mutual Fund

    A mutual fund is a professionally managed investment vehicle that pools together funds from numerous investors and invests it in such securities as stocks, bonds, and other money market instruments. They are headed by portfolio managers who determine where to invest these funds. They are highly regulated and invest in relatively low-risk money markets and in turn post lower rates than other aggressive managed funds.

    P2P Lending

    Peer-to-peer lending (p2p lending) is a form of direct-lending that involves one advancing cash to individuals and institutions online. A P2P lending platform, on the other hand, is an online platform connecting individual lenders to borrowers.


    Bitcoin is the legacy cryptocurrency developed on the Bitcoin Blockchain technology. It is a new form of money primarily developed to solve some of the inherent challenges associated with fiat currencies like inflation and over-production. It is virtual (online) cash that you can use to pay for products and services from bitcoin-friendly stores.

    Index Funds

    An index fund refers to the coming together of individuals to pool in funds that are then invested in the stock and money markets by professional money managers. The only difference between an index fund and a mutual fund is that the index fund follows a specific set of rules that track specific investments and index stocks.


    An Exchange-traded fund refers to an investment vehicle that is publicly traded in the stock exchange markets – much like shares and stocks. The fund is expert-managed and its portfolio comprises of such investment products as stocks, bonds, commodities, and more money market instruments like currencies.


    Retirement refers to the time you spend away from active employment and can be voluntary or occasioned by old age. In the United States, the retirement age is between 62 and 67 years.

    Penny Stocks

    Penny Stocks refer to the common shares of relatively small public companies that sell at considerably low prices. They are also known as nano/micro-cap stocks and primarily include any public traded share valued at below $5.

    Real Estate

    Real Estate can be said to be the land and buildings on a given property as well as other rights associated with the use of the property like the air rights and underground rights. Real estate can be either commercial if the land, property, and buildings are used for business purposes or residential if they are used to non-business purposes – like building a family home.

    Real Estate Investment Trust (REIT)

    REITs are companies that use pooled funds from members to invest in income-generating real estate projects. While a REIT may specialize in one real estate niche, most diversify and invest in as many high-income real estate projects as possible. They are especially interested in commercial real estate projects like warehouses, prime office buildings, residential apartments, hotels, timber yards, and shopping malls.


    Asset simply refers to any resource of value or a resource that can be owned and controlled to produce positive value by an individual or business.


    A broker is an intermediary to a gainful transaction. It is the individual or business that links sellers and buyers and charges them a fee or earns a commission for the service.

    Capital Gain

    Capital gains refer to the positive change in the price of a capital asset like shares and stock, bonds or a real estate project. It is the difference between the current selling price of the asset and its lower original buying price and it is considered a taxable income.

    Hedge Fund

    A hedge fund is an investment vehicle that pools together funds from high net worth individuals and businesses before having professional money managers invest it in highly diversified markets. The difference between mutual and hedge funds is that the later adopts highly complicated portfolios comprised of more high-risk high-return investments both locally and internationally.


    An index simply means the measure of change arrived at from monitoring a group of data points. These can be company performance, employment, profitability, or productivity. Observing a stock index, therefore, involves measuring the change in these points of a select group of stocks in a bid to estimate their economic health.


    A recession in business refers to business contraction or a sharp decline in economic performance. It is a part of the business cycle and is normally associated with a widespread drop in spending.

    Taxable Accounts

    Taxable Account refers to any investment account that invests in shares and stocks, bonds and other money market securities. The account is offered by a brokerage company and you are obliged to report and pay taxes on the investment income each year.

    Tax-Advantaged Accounts

    A tax-advantaged account refers to savings of investment accounts that enjoy such benefits as a tax exemption or deferred tax payment. Roth IRA and Roth 401K are examples of tax-exempt accounts whose contributions are drawn from after-tax incomes with the yields generated from investing funds therein being tax-exempt. Traditional IRA, 401K plan and college savings, on the other hand, represent tax-deferred accounts. Their contributions are deductible from your current taxable incomes but you get to pay taxes on their accrued incomes.


    Yield simply refers to the returns earned on the investment of a particular capital asset. It is the gain an asset owner gets from the utilization of an asset.

    Custodial Accounts

    A custodial account is any type of account that is held and administered by a responsible person on behalf of another (beneficiary). It may be a bank account, trust fund, brokerage account, savings account held by a parent/guardian/trustee on behalf of a minor with the obligation to pass it to them once they become of age.

    Asset Management Company

    An Asset Management Company (AMC) refers to a firm or company that invests and manages funds pooled together by its members. Like mutual or hedge funds, the AMC creates diversified investment portfolios that comprise of shares and stocks, bonds, real estate projects, and other low and high-risk investments.

    Registered Investment Advisor (RIA)

    A registered investment advisor is an investment professional (an individual or firm) that advises high-net-worth (accredited) investors on possible investment opportunities and possibly manages their portfolio.

    Fed Rate

    The fed rate in the United States refers to the interest rate at which banking institutions (commercial banks and credit unions) lend - from their reserve - to other banking institutions. The Federal Reserve Bank sets the rate.

    Fixed Income Fund

    A fixed-income fund refers to any form of investment that earns you fixed returns. Government and corporate bonds are prime examples of fixed income earners.


    A fund may refer to the money or assets you have saved in a bank account or invested in a particular project. It may also refer to the collective basket of resources pooled from different clients that are then invested in highly diversified income-generating projects.

    Value Investing

    Value investing is the art of using fundamental analysis to identify undervalued shares and stocks in the market. It involves buying these shares at the current discounted prices and hoping that a market correction pushes them up to their intrinsic value effectively resulting in massive gains.

    Impact Investing

    Impact investing simply refers to any form of investment made with the aim of realizing financial returns while positively impacting the society, environment or any other aspect of life in the process. Investment in solar projects and green energy, for instance, posts profits and helps conserve the environment.

    Investing App

    An investment App is an online-based investment platform accessible through a smartphone application. It lets you save and invest your funds in a preset portfolio that primarily consists of shares and stocks, bonds, ETFs, and currencies based on your risk tolerance.

    Real Estate CrowdFunding

    Real Estate crowdfunding is a platform that mobilizes average investors – mainly through social media and the internet – encourages them to pool funds, and invests them in highly lucrative real estate projects. It can be said to be an online platform that brings together average investors and lets them enjoy real estate projects previously preserved for high net worth and institutional investors.


    Why have I been charged a fee on a “no fee” stock trade?

    In some countries a tax or duty often called stamp duty, is charged when shares are bought. In the UK, the stamp duty on electronic purchases of a stock is 0.05 percent. In the US and many European markets, no stamp duty is charged.

    Why have I been charged an ETF fee?

    Investment companies charge management fees to cover the operational costs of ETFs. Even a no-fee broker will be obligated to pass on these fees.

    Can I buy stocks directly from a company?

    Some stocks can be bought directly from a company through direct stock purchase plans (DSPP). These plans may set up automatic purchases and dividend reinvestment at regular intervals.

    What is a limit order?

    A limit order states the price at which you want to execute an order. The shares will be automatically sold at this price. If the price of the stock rises and hits the take profit level, the trade is closed at a gain.

    What is a stop-loss order?

    A stop-loss order is a limit order stating the price at which you want to execute an order. The shares will be automatically sold at this price. If the price of the stock declines and hits the stop loss level, the trade is closed at a loss.

    Do I need a margin account?

    Brokers lend money to traders to allow them to buy more securities. The cash and securities in a brokerage account serve as collateral for the loan. Investors should not use the full amount available to borrow if it is beyond their risk tolerance. Compare the interest rates brokers charge on margin accounts, as they can vary greatly.

    What is leverage?

    Leverage refers to the amount of debt-to-capital a trader assumes by borrowing on margin. It is represented by a ratio. For a ratio of 1:30, if you have $100 in your brokerage account, you will be able to invest up to $3,000.

    See Our Full Range Of Investment Resources – Investments A-Z

    All trading carries risk. Views expressed are those of the writers only. Past performance is no guarantee of future results. The opinions expressed in this Site do not constitute investment advice and independent financial advice should be sought where appropriate. This website is free for you to use but we may receive commission from the companies we feature on this site.
    Maggie Smith

    Maggie is an investment expert with 10 years experience in dividend stocks and income investing. She has a PhD in Financial Markets and Investment Strategies and has contributed to a number of financial portals, writing stock market analysis pieces and reports on technology stocks and IPOs.

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