To invest in stocks, you decide how much you can afford to invest, open an investment account, choose which stocks or funds to buy, and then buy and hold them for the long term, ideally spreading your money across several investments to reduce risk. You don't need to be an expert or have a large amount of money to begin. What matters most is understanding what you're buying and the risks involved.
Before you begin, it helps to understand [What stocks are and how they work]. A stock is a share of ownership in a company, and its value rises and falls with the company's performance and investor demand.
Decide how much to invest
Start by deciding how much money you can invest without needing it in the near future. Stock prices go up and down, sometimes sharply, so money you might need for bills, emergencies, or planned expenses is usually better kept elsewhere.
Many investors first set aside an emergency fund, savings to cover unexpected costs, before investing. You can start small and add more over time as you become more comfortable. Only invest money you can afford to lose.
Open an investment account
To buy stocks, you need an account with a regulated investment firm or broker that gives you access to stock exchanges. Opening one usually involves registering, verifying your identity, and answering questions about your investment knowledge and experience, which regulated firms are required to check.
When comparing options, look at the fees, the minimum investment, which stocks are available, and how your investments are protected. On Mintos, for example, there are no commissions to buy or sell stocks and no holding fees. Shares you buy are held in your name in a segregated custody account, kept separate from Mintos' own assets.
Choose what to invest in
Next, decide whether to buy individual stocks, funds, or a mix of both. An individual stock ties your money to one company's performance. A fund pools money from many investors to buy a basket of investments, spreading your exposure across many companies at once.
Whichever you choose, diversifying (spreading your money across several investments, sectors, and regions) reduces the impact if one company performs poorly. If you're considering individual stocks, learn [How to choose which stocks to buy] and explore [The different types of stocks], such as growth stocks and dividend stocks.
Buy, then hold for the long term
To buy a stock, you select it on your investment platform, enter the amount you want to invest, and confirm your order. The most common order type is a market order, which buys at the current market price when the exchange is open. On Mintos, you can place an order at any time. Orders placed while the market is closed are queued and executed when trading opens, so the final price may differ from the one you saw. Once submitted, an order can't be cancelled, so check the details before confirming.
After buying, many investors take a long-term view. Trying to time the market, buying and selling based on short-term price moves, is very difficult even for professionals. Staying invested over several years gives your investments more time to recover from downturns, although there's no guarantee they will.
How much money do you need to start?
You don't need a large amount of money to start investing in stocks. Many platforms let you buy fractional shares (a portion of one share), so you can invest smaller amounts even in companies with high share prices.
On Mintos, you can invest in stocks from €1. Starting small lets you learn how investing works while keeping your risk limited. You can then add to your investments regularly if it suits your budget.
Is investing in stocks worth it?
Whether investing in stocks is worth it depends on your goals, time horizon, and attitude to risk. Over the long run, stock markets have historically grown in value, which is why many people use stocks to build wealth over time. But past performance doesn't predict future results.
Stock prices go up and down, and you could lose some or all of the money you invest. Individual companies can perform poorly or fail. Investing in stocks tends to suit people who are comfortable with that risk, can leave their money invested for several years, and spread their investments rather than relying on a single company.
This article is for educational purposes only and is not investment advice. The value of investments can go down as well as up.