How to Buy Stocks on Fidelity

Buying stocks on Fidelity is a straightforward process that empowers you to manage your investments effectively. In this guide, we will explore the step-by-step process of purchasing stocks through Fidelity, a renowned and trusted brokerage platform. This detailed explanation will cover everything you need to know, from setting up your account to placing your first trade.

Understanding the Basics of Stock Trading

Before diving into the specifics of using Fidelity, it’s important to understand the basics of stock trading. Stocks represent ownership shares in a company. When you buy stocks, you’re purchasing a small part of that company and its potential growth. Investors buy and sell stocks through brokerage accounts, and platforms like Fidelity provide the tools and resources to facilitate these transactions.

Key Concepts

• Brokerage Account: An account you open to buy and sell stocks and other securities.
• Stock Symbol: A unique series of letters assigned to a publicly traded company, used to easily identify shares.
• Market Order: A request to buy or sell a stock at the current market price.
• Limit Order: An order to buy or sell a stock at a specific price or better.

Opening a Fidelity Account

The first step to buying stocks on Fidelity is setting up a brokerage account. Here’s how to get started:

Step 1: Visit the Fidelity Website

1. Go to the Fidelity homepage.
2. Navigate to the “Open an Account” section.

Step 2: Choose an Account Type

Fidelity offers various types of brokerage accounts:

• Individual Brokerage Account: This is the most common type for personal stock trading.
• Joint Brokerage Account: Used by two people, typically spouses.
• Retirement Accounts: Such as IRAs, for retirement savings.

Select the account type that suits your financial goals.

Step 3: Fill Out the Application

Complete the application form with accurate personal information including:

• Name
• Address
• Social Security Number
• Employment Details
• Financial Information

Be prepared to verify your identity, as it is a requirement for all financial institutions.

Step 4: Fund Your Account

Once your application is approved, deposit funds into your brokerage account. You can transfer funds from your bank via electronic transfer, wire transfer, or by mailing a check.

Table 1: Funding Options

Researching Stocks

Before buying stocks, it’s essential to research potential investment opportunities:

Utilize Fidelity’s Research Tools

Fidelity offers a suite of research tools to help you make informed decisions:

• Stock Screeners: Filter stocks based on key criteria such as sector, market cap, and performance.
• Analyst Ratings: View expert opinions on potential buy, hold, or sell recommendations.
• Financial Reports: Access detailed financial statements and company reports.

Understanding Market Trends

Stay updated on market trends and economic factors that could influence stock prices. Reading financial news and following market indices like the S&P 500 can provide valuable context.

Placing a Stock Order

Once you have selected a stock to purchase, follow these steps to place an order through Fidelity:

Step 1: Log into Your Fidelity Account

• Access your account using your username and password.

Step 2: Navigate to the Trading Platform

1. From your account dashboard, go to the “Trade” section.
2. Select "Stocks/ETFs" as the security type you wish to trade.

Step 3: Enter the Trade Details

• Stock Symbol: Enter the unique symbol for the stock you wish to buy.
• Order Type: Choose between a market order or a limit order.
• Quantity: Specify the number of shares you want to purchase.
• Review and Confirm: Double-check all details to ensure accuracy.

Table 2: Order Types Comparison

Step 4: Submit Your Order

• Confirm your order details and click “Submit” to execute the trade.
• A confirmation message will verify that your order has been placed.

Monitoring and Managing Your Investments

After purchasing stocks, ongoing management of your portfolio is crucial:

Portfolio Tracking

• Fidelity Dashboard: Use Fidelity’s account dashboard to track the performance of your investments.
• Watchlists: Create personalized watchlists to track stocks of interest.

Rebalancing Your Portfolio

Periodically review and adjust your portfolio to align with your investment strategy, risk tolerance, and financial goals. This may involve buying, selling, or holding assets based on market conditions and personal objectives.

Using Fidelity Alerts

Set up alerts to notify you of significant market events, stock price changes, or news impacting your investments. This feature helps you stay informed and make timely decisions.

Addressing Common Questions & Misconceptions

FAQ

1. Is there a minimum amount required to start trading stocks with Fidelity?

   • No specific minimum for trading stocks, but some account types may have initial deposit requirements.

2. What are Fidelity’s fees for stock trading?

   • Fidelity offers commission-free trades on U.S. stocks, ETFs, and options, though regulatory fees may apply.

3. Can I buy international stocks on Fidelity?

   • Yes, Fidelity offers access to international markets, but additional costs and regulations may apply.

Common Misconception: “Stock trading is only for experts.”

Stock trading with platforms like Fidelity is accessible to everyone, thanks to tools and educational resources that simplify the process and assist beginners in making informed decisions.

Enhancing Your Knowledge

Investing is a continuous learning journey. To deepen your understanding, consider exploring additional resources like:

• Investment Courses: Many reputable institutions offer online courses on investing basics and advanced strategies.
• Books and Publications: Books by renowned investors and financial experts provide insights into successful stock market strategies.

By opening an account and following the steps outlined, Fidelity provides a comprehensive platform for stock trading with robust tools and resources. For more tailored investment advice, consult a financial advisor to align your strategy with personal financial goals.