You can invest in stocks by opening a brokerage account, depositing money, and placing a buy order, all of which you can do online in under an hour. Most major brokerages charge $0 per trade and have no minimum deposit, so you can start with as little as $5. Here’s everything you need to know to go from zero to your first investment.
Open a Brokerage Account
A brokerage account is where you buy and hold stocks. Think of it like a bank account, but instead of just holding cash, it lets you purchase investments. You can open one online at firms like Fidelity, Charles Schwab, J.P. Morgan Self-Directed Investing, Interactive Brokers, SoFi, or Public. All of these charge $0 per trade and require no minimum deposit to get started.
You’ll choose between two main account types. A taxable brokerage account has no restrictions on when you can withdraw money, making it the most flexible option. An IRA (individual retirement account) gives you tax advantages but limits when you can pull money out without penalties. If you’re investing for retirement, an IRA is worth considering. If you want full access to your money at any time, go with a standard taxable account.
During signup, the brokerage will ask for your Social Security number, a government-issued ID (driver’s license or passport), your employment status, and basic financial information like your income and investment experience. This is standard. Brokerages are required by federal law to verify your identity and report investment income to the IRS. Many firms also ask for a “trusted contact person,” someone they can reach if there’s ever a concern about activity on your account. You don’t have to provide one, but it’s a reasonable safeguard.
Most accounts are approved within minutes. Once approved, link your bank account and transfer money in. Transfers typically take one to three business days to settle, though some brokerages let you trade immediately while the transfer is processing.
Decide What to Buy
This is the part that feels overwhelming for most new investors, but you really only need to understand two categories: individual stocks and funds.
An individual stock is a share of one company. If you buy stock in a single company and that company has a bad year, your investment takes the full hit. Building a diversified portfolio with individual stocks requires researching many companies and spreading your money across them, which takes significant time and capital.
An ETF (exchange-traded fund) holds hundreds or even thousands of stocks inside a single investment. When you buy one share of a broad-market ETF, you’re effectively owning a small slice of every company in that fund. This built-in diversification means your returns reflect the average performance of the entire group rather than riding on one company’s success or failure. ETFs trade on the stock exchange just like individual stocks, so buying one works the same way.
Index ETFs are especially popular with new investors. These track a market index like the S&P 500 (the 500 largest U.S. companies) or the total U.S. stock market. They charge very low fees, typically a fraction of a percent per year, and they give you broad exposure without requiring you to pick winners. For long-term investors, ETFs are often the simplest starting point because of their diversification, lower risk, and minimal cost.
You can always buy individual stocks alongside ETFs once you’re more comfortable. Many investors keep the core of their portfolio in broad ETFs and use a smaller portion for individual companies they believe in.
You Don’t Need a Lot of Money
One of the biggest barriers people imagine is the price tag. A single share of some well-known companies costs hundreds of dollars. But most major brokerages now offer fractional shares, meaning you can buy a piece of a stock for as little as $1 or $5 instead of paying for a full share. Charles Schwab, for example, lets you purchase fractional shares of S&P 500 stocks starting at $5 each. Fidelity, SoFi, Public, Interactive Brokers, and J.P. Morgan all offer fractional shares with no commission, so every dollar you invest goes directly into the stock or ETF you choose.
If you have $50 to start, that’s enough. You can buy fractional shares of an ETF and add more over time. Investing consistently, even small amounts, matters more than waiting until you have a large sum.
Place Your First Trade
Once your account is funded, buying a stock or ETF takes about 30 seconds. Search for the company or fund by name or its ticker symbol (the short abbreviation, like AAPL for Apple), enter the amount you want to invest, choose your order type, and submit.
You’ll see two main order types:
- Market order: Buys the stock immediately at whatever the current price is. For large, heavily traded stocks, the price you see and the price you pay will usually differ by only a few pennies. This is the simplest option for beginners. One thing to know: if you place a market order after the market closes at 4 p.m. Eastern, it won’t execute until the next morning’s opening price, which could be noticeably different from the previous close.
- Limit order: Lets you set the maximum price you’re willing to pay. The trade only goes through if the stock hits your target price or lower. This gives you more control, but the trade might not execute at all if the price never drops to your limit.
For most beginners buying well-known stocks or ETFs during normal market hours, a market order works fine. Limit orders become more useful when you’re buying volatile stocks or want to be precise about your entry price.
Understand the Tax Basics
When you sell a stock for more than you paid, the profit is called a capital gain, and you’ll owe taxes on it. How much you owe depends on how long you held the investment.
If you held the stock for one year or less before selling, the gain is “short-term” and gets taxed at your regular income tax rate, which can be as high as 35% or more depending on your income. If you held it for longer than one year, the gain qualifies as “long-term” and is taxed at lower rates. For 2026, single filers pay 0% on long-term gains up to $49,450 in taxable income, 15% on gains above that threshold, and 20% only when taxable income exceeds $545,500. Married couples filing jointly get roughly double those thresholds.
The practical takeaway: holding investments for more than a year before selling can save you a meaningful amount in taxes. If you’re investing for the long term, this happens naturally. You only owe capital gains tax when you actually sell. Simply holding a stock that has gone up in value doesn’t trigger any tax bill.
If you invest inside an IRA, the tax rules are different. In a traditional IRA, you won’t pay capital gains taxes as your investments grow, but you’ll pay income tax when you withdraw in retirement. In a Roth IRA, you invest after-tax dollars now but pay no taxes on gains or withdrawals in retirement.
Build a Habit, Not Just a Portfolio
Your first trade is the hardest part, and it’s mostly a psychological hurdle. Once your account is open and you’ve made one purchase, the mechanics become routine. Many brokerages let you set up automatic recurring investments, pulling a set dollar amount from your bank account on a schedule you choose. This approach, sometimes called dollar-cost averaging, means you buy more shares when prices are low and fewer when prices are high, smoothing out the impact of market swings over time.
Stock prices will go up and down. Some months your portfolio will lose value. This is normal. The S&P 500 has historically recovered from every downturn and delivered strong long-term returns over periods of 10, 20, and 30 years. The investors who benefit most are the ones who keep investing consistently and resist the urge to sell during downturns.