How to Invest in Stocks: 2025 Beginner’s Guide

When you invest in a stock, you’re hoping the company grows and performs well over time. That’s how you end up making money. One of the best ways for beginners to learn how to invest in stocks is to open an online investment account and buy stocks through it.

You don’t have to have a lot of money to start investing in stocks. Many brokerages allow you to open an investing account with $0, though you’ll need enough money to start investing. Even small amounts — $10 or $20 — will do.

To invest in stocks, open an online brokerage account, add money to the account, and purchase stocks or stock-based funds from there. You can also invest in stocks through a robo-advisor or a financial advisor.

There are several ways to approach investing in stocks. Choose the option below that best describes how hands-on you’d like to be.

A. “I’d like to choose stocks and stock funds on my own.”

Keep reading. This article breaks down how to choose the right account for your needs and how to pick and manage particular investments.

B. “I want to be invested in stocks, but I don’t necessarily want to learn how to invest in them.”

You may be a good candidate for a robo-advisor, a service that invests your money for you for a small fee. Many of the major brokerage firms and some independent companies offer these services. We’ll cover investing through a robo-advisor in the next section

Once you know how you want to invest, you’re ready to choose your broker or robo-advisor.

A. If you’re investing on your own

You’ll need to figure out which broker you want to open that account with. Some brokers, like Fidelity, are famous for their many years in business and 24/7 customer support. Others, like Robinhood, are known for their easy-to-use platforms.

You’ll want to evaluate brokers based on factors such as costs, investment selection, investor research, tools and customer service access. Maybe you’ll want to open a brokerage account where you already have a bank account, which can help you see all your finances in one place.

B. If you’re investing through a robo-advisor

You’ll have to figure out which one to work with. Similar to shopping for a broker, there are pros and cons to each. Some robo-advisors have very low fees, while others let you talk with a financial advisor if you need extra support or more personalized guidance. It’s a good idea to compare robo-advisors to see which ones offer the services you need. Most robo-advisors charge about 0.25% of your account balance.

Brokerage firms
on Charles Schwab’s website	on E*TRADE’s website
on Vanguard’s website	on Fidelity’s website

You’ll have to give some personal information, including your Social Security number, and it will probably take around 15 minutes to open the account. With some brokerages and robo-advisors, it can take a few days to connect your bank account, so you may have to wait before you can start buying investments. Keep in mind, an investment account is just an account — it’s not an investment. You have to add money to it and then purchase investments from there in order to have your money grow in value.

If you choose to open an account at a robo-advisor, you probably don’t need to read further in this article — the rest is just for those DIY types.

Going the DIY route? Don’t worry. Stock investing doesn’t have to be complicated. For most people, stock market investing means choosing between these two investment types:

Stock mutual funds

When you invest in a fund, you also own small pieces of each of those companies. You can put several funds together to build a diversified portfolio. Note that stock mutual funds are also sometimes called equity mutual funds.

Individual stocks

If you’re after a specific company, you can buy a single share or a few shares as a way to dip your toe into the stock-trading waters. Building a diversified portfolio out of many individual stocks is possible, but it takes a significant investment and research.

If you go this route, remember that individual stocks will have ups and downs. If you research a company and choose to invest in it, think about why you picked that company in the first place if jitters start to set in on a down day.

The upside of stock mutual funds is that they are inherently diversified, which reduces your risk. For the vast majority of investors — particularly those who are investing their retirement savings — a portfolio made up of mostly mutual funds is the clear choice.

But mutual funds are unlikely to rise in meteoric fashion as some individual stocks might. The upside of individual stocks is that a wise pick can pay off handsomely, but the odds that any individual stock will make you rich are exceedingly slim.

New investors often have two questions in this step of the process:

How much money do I need to start investing in stocks?

How much money should I invest in stocks?

If you’re investing through funds, you can allocate a fairly large portion of your portfolio toward stock funds, especially if you have a long time horizon.

A 30-year-old investing for retirement might have 80% of their portfolio in stock funds, with the rest in bond funds. Individual stocks are another story. A general rule of thumb is to keep these to a small portion of your investment portfolio.

For long-term investors, the stock market is a good investment no matter what’s happening day-to-day or year-to-year; it’s that long-term average they’re looking for.

While fretting over daily fluctuations won’t do much for your portfolio’s health — or your own — there will, of course, be times when you’ll need to check in on your stocks or other investments.

If you follow the steps above to buy mutual funds and individual stocks over time, you’ll want to revisit your portfolio a few times a year to make sure it’s still in line with your investment goals.

Finally, pay attention to geographic diversification, too. Vanguard recommends that international stocks make up as much as 40% of the stocks in your portfolio. You can purchase international stock mutual funds to get this exposure.

The process of picking stocks can be overwhelming, especially for beginners. After all, there are thousands of stocks listed on the major U.S. exchanges. Stock investing is filled with intricate strategies and approaches, yet some of the most successful investors have done little more than stick with stock market basics.

That generally means using funds for the bulk of your portfolio — Warren Buffett has famously said a low-cost S&P 500 ETF is the best investment most Americans can make — and choosing individual stocks only if you believe in the company’s potential for long-term growth.

The S&P 500 is an index consisting of about 500 of the largest publicly traded companies in the U.S. Over the last 50 years, its average annual return has been more or less the same as that of the market as a whole — about 10%.