FBS turns 16
July 09, 2025
Basics
When an investor buys stocks, they’re buying ownership of a tiny fraction of a company. How much of that company the investor then owns is measured in shares.
Investing in stocks is seen as a reliable way to grow your wealth over time.
Jump right in. Open an online investment account and purchase some stocks.
You don’t need a lot of money to get started. You just need to follow a few steps.
The first thing you have to do is figure out whether you want to be involved in managing your investments yourself, and have full control over all aspects of your portfolio, or if you’d prefer to relinquish some of that control, but rest easy knowing your money is in professional (or robotic) hands.
Here’s what each option entails:
You have to assess your risk tolerance and build a strategy, and then you can have your run of the market: select stocks à la carte, or invest in funds - do whatever fits your plans.
Once you overcome your initial intimidation and start handling your own investments, you’ll immediately start learning a lot. Immersed in the daily rhythm of the market, you’ll become more profitable with practice and experience.
Platforms like FBS provide a range of trading tools, educational materials, and market analysis to support your decision-making process.
Robo-advisors plug your risk appetite/aversion and financial objectives into a formula, and use their algorithm to manage your investments.
A financial consultant can tailor their guidance to your specific needs.
FBS AI Assistant provides automated technical analysis, simplifying complex analysis and delivering tailored strategies for traders of all levels.
If you do want some help, you can further break down how involved you want to be in managing your portfolio, and choose the right platform based on that. Both a robo-advisor and a broker know how to invest in stocks.
Robo-advisors are certainly convenient. You don’t have to make decisions on your own, and rely on the good, old algorithm. The machine will create a portfolio for you that’s based on data you input.
The downside is that you will be an absentee landlord who doesn’t know what’s going on on their property. You won’t be able to customize your portfolio, and you won’t learn a thing.
If you go with a traditional brokerage, you’ll have full control over your investment decisions. You’ll be responsible for selecting individual stocks or stock funds, which typically offer a diverse range of stocks. The best brokerages provide a wealth of research tools and resources to help beginners understand the buying process.
Among those who manage their own portfolio, there are active and passive investors. Passive investors have a buy-and-hold strategy. Active investors tend to trade more frequently and seek to capitalize on shorter market movements — that’s both more quickly profitable, and more risky.
Whether you’re going it alone or using a robo-advisor, it is essential that you open the right investment account. At FBS, you can quickly and easily register for a standard account type, which provides the key features necessary for most investors.
Once you’ve chosen your account, go ahead and register. Visit the FBS website and click on Open Account. Fill in your info, and select the account type, base currency, and leverage that fit your strategy. Create a strong password to secure your account and agree to the terms and conditions.
Once you’ve verified your phone and email, and uploaded an ID, you’re all set to start!
For many individuals, understanding how to buy stocks means choosing between two primary options:
If you have a specific company in mind, investing in individual stocks can be a rewarding option. You can start by purchasing a single share or a few shares after getting more familiar with the stock market. Focus on building a diversified portfolio using individual stocks (adding other asset classes align the way), but doing so takes a lot more research and a more significant investment.
One thing that’s very important to be mindful of is that stocks can be volatile. When you’re this involved, you may panic when the market dips. But short-term fluctuations must not scare you so much that they influence your behavior. As a long-term investor, you’re in it for the long haul. There was a reason you chose to invest in this company in the first place, right? It’s worthwhile to think back on that when you see your asset trending down.
A mutual fund is a collection of stocks that you invest in with a single transaction. With one investment, you automatically diversify your portfolio and reduce risk. For example, when you invest in an S&P 500 fund, you’re effectively buying shares of all the companies in that index.
However, you have less control over the specific investments in your portfolio compared to individual stocks.
When you’re just starting out, you don’t need much. Just buy one or two stocks with a small amount of capital and learn the basics. Once you’re comfortable, you can increase the capital and the risk level of your investment.
Even a small amount will grow over time. Every penny counts.
Shares cost from under a dollar, to hundreds of thousands of dollars. Many brokerages now let you just invest a dollar amount, even if it only covers a fraction of a share. That way, you can buy into a company even if you can’t afford a whole share.
Set a budget and stick to it. Individual stocks should only comprise 10% of your portfolio.
On average, the stock market has returned about 10% per year. However, this is just an average, so don’t get overconfident. Some years will see gains while others will experience losses, and individual stocks vary widely in their performance.
When you’re learning how to purchase stocks as a long-term investor, it’s the long-term growth that truly matters.
New investors often find it difficult to keep from checking on their investments constantly. Unless you’re actively day trading, there’s no reason to monitor your portfolio multiple times a day.
While neither your portfolio nor your mental health will benefit from constant monitoring, there are times when you do need to check on your investments. It’s wise to take a look at the portfolio you’ve built of individual stocks and other instruments several times a year.
If your life circumstances have changed, you may need to adjust your strategy. If some of your assets are underperforming, you may need to re-evaluate your future with them. Many also find it a good idea to add money regularly.
If you’re only starting to invest, it is highly inadvisable to chase high-risk stocks in hopes of a quick payoff. It can be tempting but what you should be prioritizing in your investments at this point in your journey is stability and a solid performance history.
There are a few types of stocks that beginners will find easier to understand and manage:
Blue-chip stocks — Stocks of large companies with a reputation for economic power and consistent performance even in volatile times.
Dividend stocks — Stocks of companies that pay dividends on a regular basis is a good idea for newbies. Dividends are income that you can reinvest.
Growth stocks — Stocks of high-growth and high-risk companies. If you’re interested in getting into this field, you should stick to sectors with long-term growth potential, like tech.
Defensive stocks — Stocks that will stabilize your portfolio during volatility are ones in sectors that have consistently shown stability in rough economic seas.
Diversify within asset classes — Start by buying a mix of assets within a single class. Avoid being too invested (literally and figuratively) in one stock, gain exposure to a range of stocks across different industries. You can also look for sectors that complement each other to stabilize your investments.
Explore international markets — If your home market struggles, learn how to invest in stocks in international markets. Investing in foreign markets comes with its own rules and regulations, so take your time to research thoroughly.
Cross-asset diversification — Try to buy different types of assets. Indices, currencies, and commodities are all alternative investments that behave differently from traditional assets and can provide a buffer against market volatility.
When incorporating alternative investments, remember that each type has unique characteristics that go well with your traditional holdings. Here’s what to keep in mind:
Time horizon and liquidity — Your time horizon is how long you plan to hold an investment before it becomes liquid, meaning you can withdraw it. Traditional investments like stocks are generally liquid, so you can cash out whenever you need to. Alternative investments, however, often come with longer time horizons and may be harder to sell quickly. For example, commodities appreciate in value over a long period.
Industry and market variety — To strengthen your diversification, penetrate into various industries and markets. In currencies, for example, consider adding options like the euro, yen, or Swiss franc to balance against dollar fluctuations.
Risks and threats — The goal of diversification is to spread risk. Generally, investments with longer time horizons are less risky, as they have more time to recover from downturns. A mix of short-term and long-term assets can give you both stability and flexibility.
Some things in investing only come with time, but if you’re just starting out, learning from common mistakes can serve as an “anti-roadmap” to keep you on track. Here are some things to steer clear of:
All experts warn against putting money into companies you don’t fully understand. If you’re unsure, start with indices that spread risk. But if you’re drawn to individual stocks, make sure you truly know what each company does and how it makes money.
It’s easy to root for a company you invest in, especially when it’s doing well. But remember that your goal is to grow your money —not fall in love with a brand. If the company’s fundamentals shift in a concerning direction, be prepared to reconsider your investment.
You shouldn’t try to purchase stocks as some get-rich-quick scheme. Instead of expecting fast returns and ending up with disappointment and risky decisions, set realistic expectations and trust the process of steady, long-term growth.
Constant buying and selling may seem active and productive, but frequent trades come with costs. Transaction fees, taxes, and missed long-term gains can all eat into returns. Stick with quality investments and let time do its work.
Timing the market is incredibly hard, even for the experts. Research shows that most of a portfolio’s success comes from good asset allocation, not trying to catch every high and low.
Waiting for a stock to get back to even before selling is a common trap. If a company’s fundamentals have changed or it no longer fits your goals, move on and free up your money for better opportunities.
Emotions like fear and greed are quick to surface in investing, but they are followed by poor decisions. Markets will always have ups and downs, but staying calm and focused on your long-term plan generally pays off.
As a beginner, you can start investing in stocks with $100 to $500, which is enough to diversify your investments and try out different strategies. However, you can also begin with just $5-$10.
A stock represents ownership in a single company, and a mutual fund pools money from many investors to buy a diversified portfolio of various assets. Investing in stocks is riskier but potentially more profitable, as your investment depends on the performance of one company. Mutual funds spread risk across multiple investments.
A broker will give you access to more investment options and more control over your portfolio, and will also usually cost more. Robo-advisors offer automated investment management at a lower cost, but they lack flexibility and personal involvement.
A broker is the better choice for those who prefer a hands-on approach and want to actually learn how to invest in stocks.
Research companies in industries you understand or are interested in, and focus on those with strong fundamentals like solid earnings and good management. Analyze financial statements for consistent growth and healthy financials.
The tax situation for investors is very different from one country to another. Key factors to consider when you’re researching how to buy stocks are capital gains tax (with different rates for short-term versus long-term holdings), tax-advantaged accounts, transaction fees, and reporting requirements. Dividends you receive may also be taxed, depending on their classification.
The frequency depends on your investment strategy. Long-term investors review their portfolios quarterly or semi-annually, while active traders might check weekly or daily.
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