First, you need to go to a brokerage house, such as Scottrade or TD Ameritrade. They will have you fill out some papers and then you write them a check to deposit into your new account.
After that you can deposit more money by mail or transfer funds directly online from your bank.
The only requirement is that you be of age. If you are under age then you can have a parent or guardian open a custodial account for you.
Then you can ask the broker to buy shares of stock in your chosen company. You can do this at the time you set up your account or wait until you get home. When you are ready to buy, you can phone the broker or, most commonly, buy or sell shares directly on their web site.
The shares that you buy are kept on file at the brokerage. Many companies no longer issue certificates for shares but keep track electronically.
When or if your company issues a dividend, it goes directly to your account.
You can get more information at their websites.
----- ----- ----- ----- -----
Here is a quick overview of how stocks work:
Whoever owns the shares of stock are the owners of the public company, no one else. When you buy a share of stock, you are then one of the owners of that company. It could be any of over 13,000 companies that are traded with stock on the open market such as McDonald’s, Coca-Cola, Amazon.com, Ford, Krogers, your local bakery or electric company.
As a company earns money, it becomes more valuable and this value is reflected in the price of its shares on the open market. You can collect this increase in value when you sell your shares for more than you paid for them.
The company’s board of directors makes the major company decisions and decides what to do with its net earnings.
?Some or all of the earnings may be re-invested in the company so it can grow, open new stores or make repairs. When this is done, the earnings money is used up but the company is more valuable by that same amount.
The per share price, having increased because of the earnings, retain that increase when the earnings are re-invested in the company.
?Some or all of the earnings may be given directly to the shareholders and this is called a dividend. They just mail you a check or send the money to your brokerage account. This makes the price of the stock decrease by the same amount as the dividend, so you have the same value in the total of stock and dividends.
Since you are an owner of the company, the members of the board of directors work for you. You can inform the board of your ideas, concerns or recommendations and these carry the weight of your shares.
Each year there is an election and you can vote for the board positions and some special rulings, one vote for each share that you own. If you own at least 51% of the shares then your vote always wins in the election.
You are also protected when you own stock. For instance, if your company gets sued and loses more than it can pay, the law cannot come to you, one of the owners, and confiscate your house or other property. The shares may become worthless, but that is all you can lose.
----- ----- -----
If you buy stock hoping that you can sell it for a quick profit because of the daily or monthly swings in price, then you are gambling rather than investing. You are trying to guess better than the public, including professionals, how the price will change.
To truly invest, choose a company that has steady earnings each year instead of losses. If your company has very little long term debt, it will likely not get into financial trouble.
Buy quality stocks and hold on to them. When you hold these over a period of time, the share prices will go up for a real reason - the companies are earning money every year and becoming more valuable. This is not gambling; you are owner of a money making business.
If you save a portion of your income each payday and as it accumulates invest in stocks, over the course of several years you can grow very wealthy indeed. It is like hiring someone to get a job and earn money for you, and then using that money to hire more workers. Your money grows exponentially.
. .
Donut Tim is a very good answer!
FIRST get the book: "Investing for Dummies" (not an insult to your intelligence just the title of the book) and read about the theory of trading etc. Do this before giving anybody your money.
SECOND stay away from penny stocks..........fastest way to lose money.
It's like lending money... you have money and you buy stocks - like Ford Motor Company (F) - and essentially you lend them your money. Then if the stock goes up, you profit - and if the stock goes down you don't.
oh.. oay
Hello I am 18 years old and I want to invest my money.. I live in San Francisco and I just want to know how stocks work? Can I put money on the computer or do I have to go somewhere to invest money? I know I might lose money but I have money I don't really need..any answers would be fine ?
