how to get started buying stocks: Beginner Guide
How to get started buying stocks
As you begin your investment journey, knowing how to get started buying stocks gives you a clear roadmap: define goals, choose accounts and brokers, learn basic research and trade mechanics, and maintain disciplined portfolio checks. This guide explains core concepts, step-by-step actions, risks, and tools for beginners while noting timely market context and trustworthy resources. It also highlights Bitget as a recommended platform for custody and trading where appropriate.
Overview and key concepts
If you’re wondering how to get started buying stocks, it helps to begin with the basics. Stocks (also called shares or equities) represent partial ownership in a publicly traded company. Owners of common stock may receive dividends, share in capital gains if the share price rises, and typically have voting rights on certain corporate matters.
Key concepts to know:
- Shares / equities: Units of ownership in a company.
- Exchanges: Places where stocks trade (e.g., primary national exchanges in the U.S.).
- Price movement: Driven by company performance, macroeconomics, and investor sentiment.
- Dividends: Periodic cash or stock payments some companies distribute to shareholders.
- Liquidity: How easily shares can be bought or sold without big price impact.
- Market hours: Regular trading hours and extended sessions (pre-market/after-hours).
Understanding these terms helps answer the central question of how to get started buying stocks with confidence.
Why invest in stocks?
Stocks are a core building block of many long-term portfolios. Common reasons people invest in stocks include:
- Long-term growth: Historically, equities have provided higher returns than cash or many bonds over long time horizons.
- Dividend income: Some companies pay dividends, offering a stream of income alongside potential growth.
- Inflation protection: Equities can help portfolios outpace inflation over long periods.
- Diversification and exposure: Stocks give exposure to companies, sectors, and themes you believe will grow.
As of Jan 2026, market dynamics showed concentration in large technology firms but increasing breadth across the broader market. As of Jan 2026, Bloomberg reported that a few mega-cap technology stocks drove large portions of recent gains, while analysts noted profit growth was broadening beyond those names (source: Bloomberg, Jan 2026). Separately, as of Jan 9, 2026, Reuters reported policymakers and market participants are watching macro moves closely because policy and economic factors affect stock returns (source: Reuters, Jan 9, 2026). These updates illustrate why diversification and a strategy aligned with your goals matter when you decide how to get started buying stocks.
Risks and considerations
Knowing how to get started buying stocks also means recognizing risks:
- Market volatility: Prices can swing widely in short periods.
- Company-specific risk: Poor results or corporate issues can sharply lower a single stock.
- Liquidity risk: Small-cap or thinly traded stocks may be hard to sell quickly.
- Behavioral risk: Emotional decisions (panic selling or chasing winners) can harm returns.
Your time horizon, financial goals, and risk tolerance should shape how you approach stock investing.
Before you start — personal preparation
Define goals and time horizon
Clarify why you want to invest: retirement, buying a home, building wealth, or income generation. Your time horizon (short, medium, or long term) affects the types of stocks or funds you choose and the role stocks play in your overall asset allocation.
If your horizon is 10+ years, equities can be used for growth. If you need money in 1–3 years, stocks are generally riskier than cash or short-term bonds.
Assess risk tolerance and capacity
Risk tolerance is how much volatility you can emotionally accept; risk capacity is how much you can afford to lose without jeopardizing goals. Consider factors such as age, income, other savings, and near-term liabilities when deciding allocation to stocks.
Emergency fund and debt considerations
Before allocating meaningful sums to stocks, many advisors recommend an emergency cash buffer (commonly 3–6 months of living expenses) and addressing high-interest consumer debt. That reduces the need to liquidate investments in down markets.
Types of stock investments
Individual stocks (common vs preferred)
- Common stock: Represents ownership, voting rights (usually), potential dividends, and capital appreciation.
- Preferred stock: Typically has higher claim on assets and dividends, often fixed dividend payments, and limited/no voting rights. It behaves like a hybrid between stock and bond.
Buying individual stocks gives targeted exposure but increases company-specific risk.
Exchange-traded funds (ETFs) and index funds
ETFs and index funds pool investor money to track an index or theme. They offer instant diversification, generally low costs, and intraday tradability (ETFs).
For many beginners asking how to get started buying stocks, ETFs—especially broad market index funds—are recommended first because they lower single-stock risk while providing market exposure.
Mutual funds and target-date funds
Mutual funds can be actively or passively managed. Target-date funds automatically shift asset allocation over time based on a target retirement date. They’re simple options for hands-off investors but may have higher fees in actively managed funds.
Fractional shares, DRIPs, and ADRs
- Fractional shares: Let you buy partial units of expensive stocks, helping diversify with limited capital.
- Dividend Reinvestment Plans (DRIPs): Automatically reinvest dividends to buy more shares, compounding returns.
- American Depositary Receipts (ADRs): Enable U.S. investors to buy shares of foreign companies through U.S.-listed certificates.
These tools make it easier to diversify and compound returns when you’re learning how to get started buying stocks.
Choosing where to hold stocks — account types
Taxable brokerage accounts
Taxable accounts offer flexibility for deposits and withdrawals. Gains are taxed (short-term vs long-term capital gains) and dividends may be taxable each year. They’re suitable for non-retirement investing and general access to capital.
Retirement accounts (Traditional IRA, Roth IRA, 401(k))
Tax-advantaged retirement accounts provide deferred or tax-free growth depending on account type. Contribution limits and withdrawal rules apply. When prioritizing how to get started buying stocks, consider maxing employer-matched 401(k) contributions and Roth/Traditional IRA strategies before fully funding taxable accounts.
Choosing a brokerage and platform
Broker types: full-service vs discount vs robo-advisor
- Full-service brokers: Provide personalized advice and planning; higher costs.
- Discount brokers: Low-cost trading and tools; suitable for self-directed beginners.
- Robo-advisors: Automated portfolios, rebalancing, typically lower fees and hands-off management.
Bitget offers modern trading tools and custody options suitable for new and growing investors; consider the services and fee structure when selecting a platform.
Key broker selection criteria
Evaluate brokers by:
- Fees and commissions
- Account minimums
- Trading tools and mobile app quality
- Research and educational resources
- Fractional shares availability
- International market access if needed
- Customer support and security features
When you research how to get started buying stocks, compare these items and prioritize the features that match your strategy.
Safety and regulation
In the U.S., brokers register with regulators and many offer investor protections such as SIPC coverage for custodial assets (protects against broker failure, not market losses). Confirm a broker’s regulatory status and security practices (two-factor authentication, encryption) before funding an account.
Building an investing strategy
Passive vs active approaches
- Passive (buy-and-hold/index investing): Low-cost, broadly diversified, designed to track market returns over time.
- Active (stock picking/trading): Attempts to outperform the market through research and timing; typically requires more time and risk tolerance.
Understanding whether you prefer passive or active investing is central to deciding how to get started buying stocks.
Asset allocation and diversification
Asset allocation is dividing investments among stocks, bonds, and cash. Diversification within equities (by sector, market cap, geography) reduces company or sector-specific shocks. A clear asset allocation tied to your goals reduces the need for market timing.
Position sizing and portfolio concentration
Rules of thumb: limit single-stock exposure (e.g., no more than 5–10% of portfolio per company), scale into positions over time, and avoid excessive concentration unless you fully understand the risks.
Using robo-advisors and financial advisors
Robo-advisors offer automated allocation and rebalancing at low cost. Human financial advisors provide personalized planning and guidance; fees vary. For many beginners learning how to get started buying stocks, a robo-advisor or low-cost platform with educational materials is a practical first step.
Researching and selecting stocks
Fundamental analysis
Examine a company’s financial statements and performance metrics:
- Earnings and revenue growth
- Profit margins and cash flow
- Balance sheet strength (debt levels, liquidity)
- Valuation metrics: Price-to-earnings (P/E), price-to-book (P/B), enterprise value/EBITDA (EV/EBITDA)
These measures help assess whether a stock is fairly valued relative to peers and historical norms.
Qualitative assessment
Consider non-financial factors: business model durability, competitive advantages (moats), regulatory risks, and management quality. These shape longer-term prospects.
Using screening tools and research resources
Many brokerages (including Bitget’s research center and learning materials) offer screening tools, analyst reports, and curated education. Public filings (e.g., company annual reports) and mainstream financial news also provide essential information when deciding how to get started buying stocks.
Evaluating ETFs and funds
For funds, review:
- Expense ratio (lower is usually better for passive funds)
- Tracking error vs benchmark
- Underlying holdings and sector concentration
- Turnover (high turnover can raise taxes and costs)
- Tax efficiency (especially in taxable accounts)
These factors determine whether a fund fits your needs.
How to place trades and order mechanics
Order types (market, limit, stop, stop-limit)
- Market order: Executes immediately at the current market price — prioritizes execution certainty over price.
- Limit order: Executes only at your specified price or better — prioritizes price certainty over execution.
- Stop order (stop-loss): Converts to a market order when a stop price is reached — used to limit losses.
- Stop-limit: Converts to a limit order at the stop price — avoids surprise fills but may not execute.
Beginners learning how to get started buying stocks often use limit orders for initial purchases to control entry price.
Market hours, pre-market and after-hours trading
Regular U.S. market hours are typically 9:30 a.m. to 4:00 p.m. ET. Pre-market and after-hours sessions have lower liquidity and wider spreads; prices can move quickly on news. Use caution when trading outside regular hours.
Settlement and custody (T+2) and transaction costs
Most U.S. stock trades settle on a T+2 timeline (trade date plus two business days). Brokers may charge commissions or fees for certain services—review the cost schedule. Custody arrangements differ by broker; ensure assets are held in segregated, insured accounts.
Margin, shorting, and advanced products (brief warning)
Margin (borrowing to buy securities), short selling, and derivatives (options/futures) increase potential returns but also amplify losses and complexity. These are generally not recommended for beginners without clear education and risk controls.
Taxes and record-keeping
Capital gains and dividend tax basics
- Short-term capital gains (assets held ≤1 year): taxed at ordinary income rates.
- Long-term capital gains (assets held >1 year): taxed at preferential rates in many jurisdictions.
- Dividends: qualified dividends may be taxed at lower long-term rates; non-qualified dividends are taxed as ordinary income.
Tax rules vary; consult a tax professional for personal advice.
Tax reporting and forms
Common U.S. tax forms include 1099-B (sales of securities) and 1099-DIV (dividends). Track cost basis, trade dates, and wash-sale rules for accurate reporting.
Risk management and portfolio maintenance
Rebalancing and periodic review
Rebalancing restores your target allocation by trimming overweight positions and adding to underweight ones. Typical frequencies: quarterly, semiannually, or annually.
Stop-losses, trailing stops, and hedging (overview)
- Stop-loss and trailing stops can limit downside but may trigger on short-term volatility.
- Hedging (e.g., using options) is advanced and costly; generally for experienced investors.
Behavioral traps to avoid
Common mistakes include overtrading, chasing recent winners, panicking during drawdowns, and neglecting fees or taxes. A written plan reduces these risks.
Common beginner mistakes
- Insufficient diversification (too much single-stock exposure).
- Ignoring fees and taxes.
- Trying to time the market instead of following a plan.
- Overleveraging or using margin prematurely.
- Failing to maintain an emergency fund before investing.
Awareness of these pitfalls helps you frame how to get started buying stocks responsibly.
Step-by-step checklist: getting started
A concise, actionable path for those asking how to get started buying stocks:
- Define financial goals and time horizon.
- Build an emergency fund and address high-interest debt.
- Assess risk tolerance and decide allocation between stocks, bonds, and cash.
- Choose the right account type (taxable vs retirement).
- Select a brokerage or platform that fits your needs — prioritize security, fees, and educational tools; consider Bitget for custody and trading.
- Decide on a strategy: broad-market ETFs vs individual stocks.
- Fund your account.
- Place your first trade using an appropriate order type (consider limit orders).
- Keep records for taxes and track performance.
- Rebalance periodically and review your plan annually or after major life changes.
Tools, resources, and learning materials
Recommended resources for beginners learning how to get started buying stocks:
- Broker learning centers and demo/paper-trading tools (practice without real money).
- Financial educator sites such as those from major firms — check broker-provided materials.
- Independent finance sites and long-form guides for fundamentals and valuation.
- Company filings (annual reports) for primary data.
Bitget’s educational hub and demo features are useful for practicing trade execution and understanding order types before risking capital.
Glossary of common terms
- Equity: Ownership interest in a company.
- Dividend: Payment by a company to shareholders.
- P/E ratio: Price-to-earnings, a valuation metric.
- ETF: Exchange-traded fund.
- Index fund: A fund designed to track a market index.
- Broker: Firm that executes trades and holds custody of assets.
- Margin: Borrowing to buy securities.
- Limit order: An order to buy or sell at a specified price or better.
- Settlement (T+2): The standard trade settlement period.
- DRIP: Dividend Reinvestment Plan.
- IRA: Individual Retirement Account.
See also
- Personal finance basics
- Bonds and fixed income
- Mutual funds and ETFs
- Retirement planning and target-date funds
- Modern portfolio theory and asset allocation
References and timely market context
- Fidelity — Investing for Beginners; How to invest in stocks
- NerdWallet — How to Invest in Stocks
- Bankrate — How To Invest In Stocks
- Vanguard — How to invest in stocks online
- The Motley Fool — How to Invest in Stocks; A Beginner’s Guide to Buying Stock
- Green America — A Beginner’s Guide to Buying Stocks
- U.S. Bank — How Do I Invest in Stocks?
Market context cited from recent reporting:
- As of Jan 2026, Bloomberg reported that a small group of mega-cap technology stocks accounted for a large share of recent market gains, while analysts noted that earnings growth was broadening across the market (source: Bloomberg, Jan 2026).
- As of Jan 9, 2026, Reuters reported commentary from Federal Reserve officials and market observers on policy and economic topics that influence asset prices and investor strategy (source: Reuters, Jan 9, 2026).
All referenced sources were used to shape the beginner-focused approach and the practical checklist above. Note: This article is educational in nature and not investment advice.
Further steps and next actions
Ready to act on how to get started buying stocks? Begin with the checklist: set clear goals, secure short-term finances, choose the appropriate account, and practice trades via a demo environment. When you open a live account, consider starting with low-cost, broad-market ETFs before allocating to individual stocks. Use Bitget’s educational tools and secure custody features to practice and scale responsibly.
Explore more Bitget resources to continue learning and to access tools that support secure, informed investing.
