A Step-By-Step Guide – Forbes Advisor INDIA

Stocks play a key role in your investment portfolio, and learning how to buy stocks is your first job as an investor. 

Here’s our step-by-step guide on how to buy stocks:

Open an Account to Buy Stock

A brokerage account is the most convenient place to buy stocks, but it’s far from your only option. If you see yourself as a hands-on investor who likes researching companies and learning about markets, an online brokerage account is a great place to get started buying stocks. Online brokerages offer taxable accounts and tax-advantaged accounts. If you want to buy stocks to fund your retirement, consider a National Pension Scheme (NPS) that offers you certain tax advantages, like tax-deferred growth of your investments and potential tax credits on your tax return. 

Direct Stock Purchase Plans

If you’re already identified stocks that you’d like to buy, you may consider a direct stock purchase plan. Not all publicly traded companies participate in direct stock purchase plans, but many of the largest, most popular names do, and you don’t need a brokerage account to buy stocks this way. You’ll most likely be charged additional fees, however.

Direct purchase plans are almost always administered by third parties, rather than the companies themselves. In contrast, most online brokers charge zero commissions to buy and sell shares of stock. 

With the ready availability of low- and no-fee online brokerages, many direct purchase plans have fallen out of favor. However, they may allow investors to purchase a specific company’s shares at a slight discount, which may help make up for the fees they charge. Carefully evaluate the benefits of investing using a direct stock purchase plan before you make your first purchase.

Full-Service Brokerages

Full-service brokers provide well-heeled clients with a broad variety of financial services, from retirement planning and tax preparation to estate planning. They also can help you buy stocks. The trouble is…

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