7 Stock Buying Tips (what you need to know)

^{Read time - 3 minutes / Disclaimer}

Investing in stocks can:

- Improve your finances.

- Expand your net worth.

- Give you more freedom.

Unfortunately, buying stocks isn't like buying toothpaste on Amazon.

Stock Buying 101

Not knowing the basics of investing can lead to:

- Lost time.

- Lost money.

- A delayed retirement.

Fortunately, the basics don't take much time to learn.

Then...

It becomes a waiting game.

Investing can feel overwhelming at first.

It did for me.

Picking 5 random funds in my retirement account was my idea of "doing it right".

Maybe you can relate?

Over time I read books and listened to podcasts which can quickly 10x your knowledge.

Here's 7 stock buying tips worth knowing:

Tip 1: Symbol

Each stock has a symbol.

For example:

- Tesla's is TSLA.

- Apple's is AAPL.

- Google's is GOOG.

Searching for a stock can be done using its name or its symbol.

Tip 2: Price

Each stock has a list price.

You will see the stock's:

- Highest price for the day.

- Lowest price for the day.

You'll also see its highest and lowest price for the last 12 months.

Knowing the daily and yearly history of a stock is helpful before buying.

Tip 3: Holdings

There are 2 common ways to buy stock.

1. Buying company stock (like Apple).

2. Buying an ETF (like the S&P 500).

ETF stands for Exchange Traded Fund.

It's many different stocks combined.

If you buy Apple stock, you own stock from 1 company.

If you buy an ETF like the S&P500, you own stock from 500 different companies.

A common S&P500 ETF is—

Vanguard (VOO)

You can see its symbol, price, and holdings below:

Holdings show what's included in a fund (like an ETF) so you know what you're buying.

Tip 4: Volume

Each stock or ETF shows their volume.

Volume means:

How many times the stock or ETF was bought or sold that day.

It could be in the thousands or millions.

Checking a stock or ETF's volume shows you people's level of interest.

Tip 5: Expense Ratio

ETFs have a yearly expense.

For example—

The Vanguard S&P500 ETF expense ratio is .03

This means for every $10,000 invested, a $3 fee is deducted from your account yearly.

Knowing the expense ratio of a fund (like an ETF) is important before buying.

Tip 6: History

A Stock or ETF's history is often shown as:

- Daily

- Weekly

- Monthly

- Or Yearly

You can change this to see if the price is going up or going down during different timeframes.

See the volume, expense ratio, and history of the Vanguard S&P500 ETF below:

History shows you which direction a stock or ETF's price is moving.

Tip 7: Buy/Sell

Common options you're given when buying or selling a stock or ETF is:

- Market order

- Limit order

If you pick Market order—

This means you want to buy or sell the stock or ETF at its current price.

If you pick Limit order—

This means you want to buy or sell the stock or ETF at a certain price.

If the stock or ETF doesn't hit the price you pick—

Nothing happens (you don't buy or sell the stock).

Knowing the different buy/sell options is helpful before placing your order.

Conclusion

Stocks and ETFs can feel like a foreign language.

But as you learn, your investing confidence grows.

Stock Analysis​ is a helpful tool when researching stocks or ETFs (it's free).

Keep building 💰

See you next week.