Investing In Stocks for Beginners: Complete Guide - AlwaysWealthy

Investing In Stocks for Beginners: Complete Guide

If you’re new to investing in stocks, this guide will teach you the basics, show you what stock broker to pick and break down the best stocks to invest in as a beginner. Investing isn’t rocket science. It seems overwhelming and confusing at first, but once you get the hang of it, it’s easy and fun. We’ve put together a comprehensive guide called Investing in Stocks for Beginners to help you get started as a complete newbie. By the end of this guide, you’ll have the necessary knowledge to start making your first investment.

Table of Contents

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Investing In Stocks for Beginners

New to investing in stocks? This guide is for you.

When you’re investing in stocks, you are actually investing in a company. Don’t think of investing as buying stocks but rather as buying companies.

If you were able to outright buy and own a company, which one would you choose?

Investing in stocks allows you to own a small part of a company. Instead of buying the entire company, you are buying a fraction of the company. If you were to buy an entire company, it would cost you millions, billions or trillions.

Few people have this much money. Luckily, there are companies that have gone public. This allows almost anyone to own a small fraction of a company.

What Does it Mean When a Company Goes Public?

When someone starts a business, they start small. There might be an initial round of private investors that fund the company and provide it with enough capital to get going.

This is venture capital investing. In return for investing in a company in its early days, venture capitalist get a percentage of the company.

Venture capital investing usually happens behind closed doors.

When a company gets big enough, it might decide to go public in order to raise more money. This simply means that a company offers its shares publicly. Once a company has gone public, anyone can invest in the company and own a small percentage of it.

When you invest in a company, you become a shareholder. In some cases this also allows you to vote on the future direction of the company and participate in shareholder meetings.

Some companies pay a dividend to their shareholders. A dividend is a portion of a company’s profits that shareholders receive.

Let’s move on to the next part of our guide Investing in Stocks for Beginners.

How to Invest In Stocks and Make Money

Now that you know what being an investor and becoming a shareholder means, it’s time to talk about how you can make money by investing in stocks.

There are three popular ways to invest in stocks that are suitable for beginners.

Value Investing

The first one is value investing. When you invest for value, you are looking for companies that you believe have solid, “future proof” business models and are currently trading at a discount.

Let’s say you like Coca Cola and believe it will stick around because of its world-famous brand. If you think it’s a great company and its stock is trading below its fair value, you could invest.

Value investors look to buy great companies at great value and hold them for a very long time. Warren Buffet is the most famous value investor.

Value investors are bargain hunters. They look for great, undervalued companies.

Growth Stock Investing

Another popular way of investing in stocks for beginners is growth investing. Growth investors are less concerned whether a company is “fair value”. Instead, they look for companies with massive growth potential.

If a company is expected to grow a lot in the future, it is likely that the price of its shares will grow as well.

Instead of hunting for bargains, growth investors look for smaller companies that have a lot of upside potential. Growth investing is riskier than value investing, but if you pick the right companies you might get rewarded handsomely.

Dividend Stock Investing

Dividend stock investing is a third popular investing strategy among beginners. Some companies pay a percentage of their profits to shareholders in the form of a dividend.

When you invest in dividend stocks, you make money when the price of your shares increases. But regardless if the share price goes up or down, you also receive a dividend.

Dividends are paid out yearly, quarterly or monthly. You receive the dividend in the form of a cash payment to your account. The more shares you own, the higher your dividend payout.

Dividend investing allows you to generate income. This is why some people call it income investing. You can make money if the price of your shares increases by selling them at a profit. And you generate income from the dividend payments.

Now that you understand the three most popular investing strategies, let’s move to the next part of our guide Investing in Stocks for Beginners.

What are the Best Stocks for Beginners With Little Money?

Half of the fun of investing comes from doing your own research and finding companies you believe in and understand. Warren Buffet, the famous value investor, doesn’t like internet and technology stocks that much.

Since he’s older and doesn’t understand technology as well as traditional businesses, he mostly stays away from technology stocks.

Younger and more technologically savvy people might be the opposite of Warren. They don’t understand traditional businesses but totally “get” technology.

As a general rule of thumb it is best to invest in companies that you understand. One popular way of investing in stocks for beginners is to pick companies that you use yourself.

If you’re a Coca Cola fan, why not research the company and learn about its dividend? If you want to get into growth investing and you use Amazon a lot, why not look into its business model and fundamentals?

Read more: Where to Invest Money to Get Good Returns

Chances are that you are using products of companies that have gone public on a daily basis. Since you are likely to understand their business models better, it might be a good idea to research them as investments.

If you’re looking for the best stocks to invest in with little money, look for companies that have stocks with reasonably low share prices.

Amazon is trading at $3,297 at the time of writing this article. So if you only have $1,000 to invest, Amazon isn’t an ideal stock for you. The good news is that there are many stocks that trade for a few hundred dollars or less. These are stocks you can invest in even if you have little money.

How to Find the Best Stocks to Invest In

If you’re interested in investing in a particular company, you can search for the company name on Yahoo Finance.

For example, if you want to look up Coca Cola, you can type it into the search bar. Every publicly listed company also has a ticker symbol.

How to find stocks to invest in
How to research stocks

A ticker symbol is a short “code” that allows you to identify and look up a publicly traded company. Coca Cola’s ticker symbol is KO.

While many platforms allow you to search for stocks without the exact ticker symbol, it’s good to note the ticker symbol. Once you’re ready to buy the stock, you can type the ticker symbol into your broker’s search bar.

This will then pull up the right stock.

On Yahoo Finance you can find plenty of information about publicly listed companies. You can see a chart of the stock price.

Are stocks in an uptrend?
How to figure out if stocks are in an uptrend or downtrend

In general, it’s probably not bad if a company’s stock has been in a long-term uptrend.

You can easily figure out if a stock is in an uptrend or downtrend by looking at the 5 year view or setting the chart to “Max”.

Click on “Full Screen” to make it big.

As you can see above, Coca Cola has been in a long-term uptrend. While there is no guarantee that this uptrend will continue, it’s good to get an idea of how a stock performed in the past.

You can also find other information on Yahoo Finance such as the dividend yield.

Dividend stock investing for beginners
How to find the dividend yield of a stock

If a company doesn’t pay a dividend, this field won’t display anything.

Coca Cola has a 2.89% dividend yield. This means if you invested $1,000, you would make $28.90 per year from dividends. If you invested $100,000, you would earn $2,890 per year from dividends.

Whenever you get a “tip” about a company to invest in, or you are interested in buying a certain stock, research the company thoroughly first.

Has the stock price been in an uptrend? Has it been chopping sideways or even trending downward? This is one of the first questions to ask.

What is the company’s business model? How likely will it still be around in a few years or decades? How will the company stand up against competition? These are important questions to ask yourself.

Once you have done your own independent research, you can pick your highest conviction companies and invest in them.

Read more: Dollar Cost Averaging Vs Lump Sum Investing: What Is Better?

An Alternative to Investing In Stocks for Beginners

In case you don’t feel confident enough to conduct this type of research yet and buy individual stocks, you can invest in an Exchange Traded Fund (ETF).

ETFs are publicly traded funds that consist of a basket of different stocks.

For example, instead of investing in individual stocks you could buy the SPDR S&P 500 ETF Trust. This ETF with ticker symbol SPY consists of the top 500 publicly traded companies in the United States.

This allows you to invest in a whole basket of stocks at the same time. Investing in the S&P 500 is kind of like investing in the US market as a whole.

But there are also other ETFs. In case you’re interested in a more aggressive growth investing strategy, you might want to consider an ETF like the Invesco QQQ Trust.

QQQ tracks the Nasdaq composite index, which consists of the top technology stocks in the United States. It includes companies like Amazon, Tesla and Meta.

ETFs are a great way to invest in stocks for beginners. They offer more diversification. Rather than having to be right about an individual stock, you have to be right about the industry or market as a whole.

The good news is that you can buy and sell ETFs with most brokers.

Best Investing Apps and Stock Brokers

In order to invest in stocks, you need a stock broker. A stock broker is simply a financial institution that allows you to buy and sell shares of a company.

You can think of it like a bank account. Similar to a regular bank account, you’re able to deposit cash.

An account at a stock broker allows you to invest the cash you deposited. Each stock broker has its own platform that allows you to see stocks, buy them, sell them and track the performance of your stock portfolio.

There are a lot of different stock brokers and investing apps available. There are three beginner-friendly brokers that we recommend.


The first broker we recommend is TastyWorks. While TastyWorks focuses more on options than stocks, it comes with zero fees for stock trading and an extremely simple and user-friendly interface.


Options are a form of derivative.

But even if you’re not planning to trade options, TastyWorks is one of the best stock brokers and investing apps available on the market.

Apply for a cash account and not a margin account. Use the platform to buy and sell stocks. However, steer away from option trading if you’re a beginner.

TastyWorks has no stock commissions and is easy to use and they have great customer support.

Many brokers only accept clients from the United States. TastyWorks accepts international clients, which is a benefit because almost anyone can open an account and benefit from zero commission investing.

If you’re planning to buy stocks and potentially want to buy and sell options in the future, TastyWorks is an excellent choice.

As long as you only buy and sell stocks, you pay no fees.

Sounds too good to be true?

Many brokers offer zero or low-commission stock purchases. But not many have such a straight forward mobile app, outstanding customer support and accept international clients.


Robinhood is probably the most popular investing app on the planet. They offer zero-commission investing, a simple mobile app and a beautiful interface.

If you’ve ever watched a YouTube video about investing, chances are that you’ve seen Robinhood in action. A large majority of retail investors in the United States use Robinhood for investing.

Investing in stocks for beginners is a breeze with Robinhood

If you’re young and are looking for a simple and zero-commission way to invest, Robinhood is the perfect broker for you.

Opening an account with Robinhood is fast and easy. After funding your account, you can start investing in stocks right away.


Webull is another popular broker for beginners.

Just like TastyWorks and Robinhood, Webull also charges zero commissions, which means you can focus on making money with investing instead of paying fees.

Investing in stocks for beginners is easy with WeBull

Opening an account with Webull is fast and applications are approved automatically. This means you can fund your account and start investing right away.

Investing In Stocks for Beginners Step-By-Step

As soon as you’ve signed up with a stock broker and funded your account, it’s time to buy your first stocks.

We’ll demonstrate how easy it is to buy stocks with the TastyWorks mobile app. The process for Robinhood and WeBull is just as simple and straight forward. In most cases, it’s just a matter of searching for the stock’s ticker symbol and placing your order.

Step 1: Log in to the TastyWorks App

Enter your email address and password on the login screen and then log in to the mobile app.

On the next screen, you’ll see a search bar that allows you to look up stocks.

Step 2: Type in the ticker symbol of the stock you want to buy

Once you’ve typed in the ticker symbol, select the stock in the drop-down menu. Double check everything and make sure it’s the right stock.

Some companies have similar names and ticker symbols. So if you’re not careful, you might buy the wrong stock.

How to Buy Stocks as a Beginner with TastyWorks
Step-by-step purchase

Step 3: Tap on “Stock”

In this case, you want to purchase the stock and not the option. Options are derivatives and you should steer away from them if you’re a beginner.

Tap on the word “Stock” in the green box to indicate you want to buy the stock.

Step 4: Enter the stock quantity

On the next screen you can decide if you want to buy or sell the stock. You can also choose the order type, time-in-force, quantity and limit price.

Make sure the green “Buy” button is showing up, which means that you are buying the stock. Leave “Limit” as the order type and “Day” in the time-in-force field.

Then decide how many shares of the stock you want to purchase and type in the number. You can leave the limit price field as it is.

Step 5: Click “Review and Send”

On the next screen, you can review your order to make sure everything is correct.

Double check the quantity, estimated cost and also make sure you’ve selected the right ticker symbol. If you made a mistake, click “Edit” or “Clear” to start from scratch.

Step 6: Submit your stock purchase

Once you’ve checked everything and are happy to proceed with the stock purchase, click on the green “Submit” button. This will then submit your order.

In most cases, orders are filled immediately. This means, you are now the happy owner of the stocks you bought.

Summary: Investing In Stocks for Beginners

As you can see, investing isn’t rocket science. It’s like buying a fraction of a company. Luckily, this is incredibly easy and straight forward these days and doesn’t require much technical skills.

Picking the right investments isn’t as easy though. Being curious, looking up companies and doing your own research are all part of being a good investor.

ETFs are a great way of investing in stocks for beginners who don’t want to research and own individual stocks.

Getting started on your investing journey was never easier. While investing is a lifelong skill that needs to be acquired with time, you can become an investor even if you’re a beginner.

Keep in mind that every investor once started as a beginner. We hope you enjoyed our guide Investing in Stocks for Beginners.

March 23, 2022