How do I invest in stocks?

Buying stock means purchasing partial ownership in a public company through a licensed broker-dealer. You can't buy shares directly from a company on the street — every retail stock purchase in the U.S. runs through a registered brokerage firm and a national securities exchange. Here's the practical process from account to order.

Step 1: Open and fund a brokerage account

Choose an SEC-registered broker-dealer that's a FINRA member — verify any firm's registration and disciplinary history at [FINRA BrokerCheck](https://brokercheck.finra.org/) before funding an account. Most major online brokerages now have no account minimum and charge $0 commission on U.S. stock and ETF trades. See [how to open a brokerage account](/answers/how-to-open-a-brokerage-account) for the full application and funding walkthrough.

Step 2: Decide individual stocks vs. funds

A single stock's value depends entirely on one company's performance — a concentrated bet with correspondingly higher company-specific risk. A [mutual fund](/answers/what-is-a-mutual-fund) or [ETF](/answers/what-is-an-etf) spreads that same dollar across dozens or hundreds of companies at once. Many first-time stock investors start with a broad market index fund or ETF for the core of their portfolio, and add individual stocks — if at all — as a smaller, separately-tracked slice.

Step 3: Place an order

The two most common order types, per [Investor.gov's guide to order types](https://www.investor.gov/introduction-investing/investing-basics/how-stock-markets-work/types-orders), are a **market order** (executes immediately at the current market price — execution is guaranteed, price is not) and a **limit order** (executes only at your specified price or better — price is protected, execution is not guaranteed). New investors buying a liquid, widely-traded stock or ETF commonly use market orders; a limit order adds price control for less liquid securities or volatile moments.

Step 4: Hold with a plan, not a hunch

Stock prices fluctuate daily on earnings, economic data, and sentiment that no retail investor can reliably predict. Frequent trading tends to increase costs (commissions, spreads, and — in a taxable account — short-term capital gains tax at ordinary income rates) without a proven edge for most individual investors. A written plan for why you own a position, and what would change your mind, tends to outperform reacting to daily price moves.