How do you purchase stocks?


Quick Answer

You can purchase stocks by opening an account through an online broker, a discount broker who offers assistance, a full-service broker or a money manager, according to Investopedia. Each professional charges a fee to purchase stock on your behalf.

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How do you purchase stocks?
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Full Answer

Online or discount brokers buy stocks as directed, but they do not offer any investment advice. A discount broker who offers assistance gives clients information to help them choose potentially profitable stocks, but this type of broker does not make actual stock recommendations, explains Investopedia. To make a purchase, you specify the amount of shares to buy at the current market rate by telephone or on a brokerage's website. Then you pay a commission that is typically based on the amount of shares you buy or a flat rate per transaction.

A full-service broker offers individualized investment advice based on your income, assets and other pertinent factors. These brokers create an overall financial plan that includes stock recommendations, and then the broker purchases these stocks with your permission. These brokers charge more than discount brokers, but they offer tailored advice to their clients, notes Investopedia.

Money managers purchase stock on your behalf. These professionals charge large fees to wealthy clients who have six figures or more to invest. Money managers develop a complete investment plan for your account and trade stocks that align with your goals, according to Investopedia.

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