Best Ways to Invest in Stocks

Best ways to invest in stocks rewards of stock investing can be significant, but there are several ways to get started. You can choose to be a hands-on investor and manage your own portfolio through an online brokerage account or opt for a passive strategy with the help of a robo-advisor or financial advisor. You can also take advantage of retirement plan options like 401(k)s that include stocks as investment options and many employers will match your contributions.

Before you dive in, make sure to understand the risks and costs associated with investing in individual stocks. You can find this information by looking up the ticker symbol, which is a string of 1 to 5 letters that’s unique to the stock, on the Securities and Exchange Commission’s EDGAR system. Then, you can compare it to the company’s financial statements, which are available on their website.

Top 10 Best Brokers for Trading in 2025: UK & Global Picks Compared

Stocks can be volatile, so it’s important to have an investment strategy that fits your risk tolerance and time horizon. For beginners, a buy-and-hold strategy using stock mutual funds or index funds is generally a better option than trying to trade individual stocks.

If you’re attracted to the thrill of picking individual stocks, consider limiting them to 10% or less of your portfolio. That will still give you the opportunity to earn more than inflation over the long term, but it reduces your chances of getting whiplash from daily fluctuations. Some companies offer direct stock purchase plans (DSPPs) where you can buy shares directly from the company without a broker at a discount. They may also have dividend reinvestment programs where you can automatically buy additional shares with your dividend payments, which can save on fees and tax reporting.