Alex Williams
Alex Williams  —

Last updated:

Apple stock (NASDAQ:AAPL) is near the size of the UK, in terms of its market value.

When you invest in a massive firm like Apple, Amazon, or Google, you get a piece of this ginormous capital and even a piece of ownership in the company itself. 

How to Invest in Stocks Logo

Shares could rise or fall with time. But the world’s largest stocks make you far more likely to harvest profits as a shareholder regardless of short-term market swings. In this guide, we’ll go over how you can invest in stocks!

Table of Contents:

How to Invest in Stocks: TL;DR

Considering trading stocks? When crunching your Trading Data, take time to learn your strategy. Adapt to your chosen provider. And use good financial common sense...

This guide will give you a whirlwind overview of the topic. There is no substitute to using a professional grade stock trading course. But a few key things to know when understanding how you make money in stock trading:

  •  Stocks are selected by first knowing how much risk you’re willing to take, versus how much profit potential it has. Any earnings are made largely in the two following ways:
  • If the price of shares increase while you own it, such as in Apple stock, you can sell them for more than you paid (day trading also works like this). 
  • And if the stock you have invested in offers dividends on a regular basis to its stockholders (normally every quarter), some of these profits go to you.

Stocks Explained: The Basics…

Shares offer lots of investment flexibility, which means they can be approached as a short-term investment strategy, long-term for retirement, or even for full-time professional day trading.

You can only invest in stocks for companies who have “gone public” and are therefore tradable on the open market. Companies enter the stock market in order to raise more funds for day-to-day operations, or for specific expansions. Their ‘stocks’ become tradable. 

The company’s full stock represents its full market value. As with the Apple example given in the introduction, this could represent billions or trillions of dollars.

You therefore buy only pieces of that total value, known as ‘shares,’ thereby becoming shareholders. Which means you’re making an investment in a company’s future market value whenever you buy shares in it - hoping it will perform well and grow in value across time.

This happens when another investor is willing to purchase it from you for more than you paid for the shares originally, so that you earn a profit.

Doing any investments in the stock market is a long game. Even people who make profits from minute-to-minute and hour-to-hour market movements will only make significant profits through far longer horizons. 

It’s also risky without proper experience to focus too intensely on only one company stock or type of stock, unless these are all, or mostly, blue-chip companies - this type of corporation has such a large market capitalization that they weather unexpected turns in the market.

The opening of 2022 was a good example: an avalanche of international events including explanation of inflation, the Russian-Ukrainian conflict, rises in UK and Federal Reserve interest rates, as well as lingering effects from the COVID-19 pandemonium led to increased market sell-offs.

But the majority of financial advisers would urge you to hold onto the right kind of stock through turmoil - Ray Dalio doubling-down investments in key Chinese retailers is just one example of this counterintuitive approach; seen during China’s regulatory troubles in 2020.

Understand that the likes of Warren Buffett spend tens of thousands of hours absorbing historical financial data, and possess powerful minds and talent for this business.

But a straightforward way for beginners to begin learning how to invest in the stock market is to use an online investment account, particularly a well-performing index fund or stock mutual funds.

A few brokers also offer demo accounts, which lets you try out live investments in the real stock market via simulators without actually investing your money.

What Kind of Investor Will You Become?

The first type of investor is a long and active player. Warren Buffett is a good example.

These types seek to master the financial principles behind how economic markets work.

Wolf of Wall Street

So they look at the big-picture movements taking place behind the scenes between countries, corporations, events like COVID-19 impacting businesses, and more.

Whereas minute to minute day traders - who make multiple decisions across the day - are just as active, but focus on technical indicators, buying and selling rhythms, and patterns unique to the exchange itself. This type of trading is the most stressful and intense - think “Wolf of Wall Street.”

A third type of stock investor is the everyday person with a retirement plan; relying on the company to invest a set portion of their monthly income into an investment fund, or is someone using a financial adviser. Some students use Stocks and Shares ISAs.

3 approaches to investing in stocks

☑️  A. "I want to choose my own stocks and stock funds." 

Hands-on investors, eg. day traders and medium to long stock investors, are both types of professional investors. The reason why investing in the stock market has such a low success rate is that the majority of traders are amateurs  - there’s also an element of luck involved.

But any active stock investments that are used as a primary source of living should only be attempted by professionals who have spent years studying how stock markets work, using credible educational resources.

At a certain point of study and practice, these apprentices eventually develop a subconscious instinct for how the stock market works, and can make accurate decisions after doing things like reviewing technical indicators or the financials of a company. 

To a beginner however, this data is completely meaningless.

☑️ B. "I want a financial adviser to manage my investments." 

The vast majority of brokerage firms offer this, as well as independent advisers. The percentage of this category of investor also uses robo-advisors, which has the lowest level of dependability. The dependability of investing in individual stocks varies according to their track-record of those stocks.

For instance, the probability of Amazon stock plummeting to half its value in the next five years is slim compared to smaller companies like Slack or Dropbox. Meanwhile, the company has deep momentum for future growth.

☑️ C. “I want to diversify my portfolio for retirement and long savings.” 

Using mutual funds is the safest, although not completely risk free, approach to allocating surplus cash you have that is suited to investment.

One great example of this is a company like Vanguard, which has proven returns on its holdings year after year since its inception - these investments won’t be limited to individual stocks, but will offer a selection of stocks inside of a mutual or high-performance index fund.

Best App for Investing in Stocks?

Brokers either offer a full or discount service.

Full service brokers provide the comprehensive package of brokerage services, such as pension plans, health care, and everything else financially related.

These companies are normally reserved only for clients with a larger network, as it can involve significant fees and higher transaction rates, management fees, and sometimes yearly subscription fees. Minimum deposits are typically over £15,000.

Whereas discount brokers are now the most commonly-used brokerage. Discount online brokers let you access your own tools needed to carry out transactions. With more competition in the retail investment apps industry, the range of features available using discount brokers has expanded, such as more mobile app power and educational resources.

⭐ The most realistic platform for beginners?

eToro 🔥 – Best Broker for Beginners

eToro has garnered an immense amount of popularity through its sponsorship and advertising deals internationally around the professional, celebrity, and sports world.

But its key provisions are down-to-earth…

A social reason to use this platform is the thriving community made up of millions of users who collate guidance, with a copy-trading feature that automatically imitates the day-to-day activities of the most successful investors on the platform.

etoro logoVisit eToro

Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 mins to learn more.

In terms of security, eToro (review) hedges this risk by squeezing out the number of dodgy accounts through requiring user verification, also called Know Your Customer (KYC) - before users can begin trading from accounts, joining communities, or accessing markets through the broker.

Some brokerage apps do not use two factor authentication: eToro isn’t one of them. When you also add minimum account deposits, eToro offers entry-level access into the stock market which is slightly more convincing than robo-advisors, because you're mirroring a real human trader with years of experience in the marketplace. 

As eToro has so many connections worldwide, you’re given access to over 2,700 stocks which all have no commission, in industries that range from social media to technology, from Hong Kong to London -  and fractional shares options, in order to populate your portfolio with blue-chip stocks.


  • Good for beginners
  • Excellent news
  • Excellent social features
  • Best copy-trading: automatically mirror experienced traders


  • Stocks are still risky and required knowledge

Robo-Advisors 🦾

Nevertheless, ultimately you’ll need a stock trading course if you intend to really grasp how to invest in stocks as a newbie (if you are investing serious money you can’t afford to lose). These fill you in on the latest tools–what works and what is a waste of time. But what are roboadvisors?

After 2008’s economic collapse, a new type of investment tool came to life: the roboadvisor. Created by Jon Stein and Eli Broverman, the objective of this technology was to reduce fees for new investors and optimise investment guidance.

Since it was launched, other similar companies were formed, and even the oldest and most established online brokerage such as Charles Schwab have since added robo-ish advisory offerings. Indeed, a survey carried out by Charles Schwab discovered that 58% of U.S. people intended to use some type of robo guidance by 2025.

With exponentially projected advancements in Ai on the horizon, possibly, this may not seem as ridiculous as it once did. In essence, these tools make algorithmic based decisions on your behalf, such as rebalancing and tax loss harvesting. But these only have much efficacy when used over the long run in the broader context of building wealth.

Employer-based Stock Investment

For those on a tighter budget, it is possible to invest 1% of your salary into a retirement package through your workplace.

Most likely, you won’t even notice this contribution.

Stock Investment

This form of retirement plan leans heavily on what Einstein called the eighth wonder of the world, the compounding effect. This money is allocated to services who then invest in mutual funds - maybe even including your own company’s stock.

Account Minimums, Fees, Commissions

As all economists know, there’s no such thing as a free lunch. Although certain platforms like eToro promote their services as  commission free investment; at some point along the chain of using the service, they will need to earn a commission on your use.

And the majority of financial institutions have a minimum deposit rule. Your account cannot be opened until a certain amount of money at least has been deposited. Sometimes, this is even over £1,000. 

It’s difficult to make any significant money without a significant starting point, when discovering how to invest in stocks. You need to balance choosing the service with the most credible track record for annual returns against minimum deposits required and other fees.

Most commonly, the broker is going to make a commission with each transaction. If not, this will be made up in another way. Investment is not a charity, it is a business.

Nonetheless, certain fees suit certain types of investors better. For instance, they traders carry out numerous transactions across a single day. So they’ll want a platform with optimal fees for high-frequency trading. According to how these fees stack up, this can affect your profitability. Typically, fees quickly stack up if you constantly jump in and out of positions, particularly when investing small amounts of capital.

The number of trades is calculated according to the number of different types of assets involved, and/or the type of trade. For instance, purchasing one share in four separate companies, will add up to four separate trades with a charge incurred for each one. 

For example, let’s say you purchase a total of £1,000 in these for companies. Before this can be completed, you would be charged £40 in trading fees - supposing that each had a fee of £10 - this would equate to 4% of your £1,000. Which means a 4% loss right from the outset before your investment has a chance to make profits.

Also, if you wanted to sell these stocks, you would once again be charged the same fee, which would mean a total of 10% of your total spend being a starting loss that you would need makeup, in order to make a total net profit.

Mutual Fund Stocks Fees


There are also fees that occur for Stocks and Shares Mutual Funds.

Mutual funds are professionally curated pools of funds for multiple investors that are allocated according to very specific and time-tested investment strategies, such as investing in blue-chip UK stocks.

You’ll be charged when entering a mutual fund. One of the most common fees to factor-in is the management expense ratio (MER), which comes into play if your mutual fund is actively managed by a team, according to the number of holdings in the fund yearly. Typical MER figures are 0.05-0.7% annually, according to the specific fund. But the greater the ratio, the greater the impact on potential returns.

Another type of cost is sales charges which are also known as loads, for mutual funds. Loads can come into play on the front end, with others not having any loads, and some being and back-end-loaded funds. You should be aware whether or not your find incurs a sales load, before you enter into it.

The main advantage of mutual fund costs, compared to stock investment costs, is that mutual fund charges are fixed, regardless of your investment size. Which means, once you’re able to meet the minimum deposit for account opening, you can invest as little as £50, or much more, per month into the fund. The term for this loophole is known as dollar-cost averaging (DCA), and it can substantially benefit new investors.

Diversifying, ie. Hedging Against Risks

Diversification is the only exception to the rule about there being no “free lunch” in economics.

In short, by allocating funds to a range of stocks, you lower the chances that a single suboptimal performance will substantially affect your overall capital.

In a nutshell, this encapsulates the old saying “Never put all your eggs into one basket.”

Regarding diversification, the biggest challenge for achieving this will naturally occur when trying to invest in stocks.

This is for reasons mentioned earlier: stock fees quickly compound in direct relationship to the number of different choices you’ve made - this is because each separate stock is considered a different trade itself. Furthermore, there was a double fee: one for beginning the trade and one for closing.

So a varied portfolio has a much lower chance of making a decent return across ordinary time horizons used for mutual funds, if the starting deposit is relatively small, such as £1,000.

Which is why mutual funds and ETFs have become a staple for regular retirees and long investors - using the DCA mechanism, relatively small amounts can be arrested in funds that come already loaded with tons of very large securities, across a large number of different stocks.


Is Stock Investing Safe For Beginners?

Only if approached sensibly.

Since the expansion of retail investment apps, the financial investment market has increasingly tailored itself to the everyday investor. For instance, 401(k)s used in North America have been around since the late 70s, it provided a way for the populace to contribute to a retirement plan through their employers.

And today, especially with the radical adoption pace of crypto, it’s increasingly easier to directly mutual funds with tried-and-tested investment managers like Vanguard. These services are so robust that foremost financial experts like Ray Dalio easily recommend them for long-term returns on savings.

But with any aggressive stock investment, risk immediately quickly piles up. So any short-term lottery wins are a bad idea. As for robo-advisers - the jury’s still out, particularly as artificial intelligence magnifies in its accuracy.

How Can I Choose My Stock Investments? 🏝️ ⛵

The short answer is that you don’t, unless you are willing to take time to understand what you are doing. Two key pillars of stock investment are looking at the time horizon for your investments, and your risk tolerance.

In terms of the time horizon, if you are planning for a long-off goal such as creating a pension pot for retirement, then you may sway towards investing through a mutual fund organisation with a very deep track record and credibility.

The goal of mutual funds is for the money to be spent about, and adjusted across time as the market shifts and the economy changes, in order for your pool of investments to outperform inflation and the market average across time. Bonds, compared to stocks, have more insurance. Neither is suited to short-term investments, however. 

The last factor is your risk tolerance. Which means talking to your mutual fund manager and configuring your portfolio according to how aggressive you want to be - like a prize fighter, the bolder bold, the bigger the win but the greater the possible hurt.