How to Buy Stocks With Fidelity

If you've ever wondered, "How do I buy stocks with Fidelity?" you're not alone. Fidelity is one of the largest and most respected brokerage firms in the world, offering a range of services designed to help investors of all experience levels. Whether you're a beginner or a seasoned trader, learning to navigate Fidelity's platform can enhance your investment strategy. This guide will walk you through the entire process of buying stocks with Fidelity, from setting up an account to executing a trade.

Setting Up Your Fidelity Account

Before you can start buying stocks, you'll need to have a Fidelity account. Here are the steps you should follow:

1. Choose the Right Account Type

Fidelity offers several types of accounts, each designed to meet different investment needs:

• Individual Brokerage Account: A standard account for buying and selling stocks, ETFs, options, and more.
• Retirement Accounts: Options like IRAs or Roth IRAs for long-term, tax-advantaged savings.
• Joint Accounts: For shared ownership between two or more people.
• Custodial Accounts: For parents managing investments for minors.

Evaluate your investment goals to choose the appropriate account type.

2. Open Your Account

• Visit Fidelity's Website: Navigate to Fidelity's account opening page.
• Provide Personal Information: Prepare to provide details such as your Social Security Number, employment information, and financial details.
• Review the Terms and Conditions: Understand the fees, risks, and obligations tied to your chosen account.
• Fund Your Account: Use your bank account to transfer funds into your new Fidelity account. Be aware of any minimum deposit requirements.

3. Access Your Account Online

• Download Fidelity's mobile app or access your account through their website.
• Set up security features like two-factor authentication for enhanced protection.
• Familiarize yourself with the interface, which includes your account summary, trade options, and research tools.

Navigating Fidelity's Trading Platform

Once your account is set up and funded, the next step is to learn how to navigate Fidelity's trading platform to buy stocks.

4. Research Stocks

Fidelity offers a comprehensive suite of research tools to aid your investment decisions:

• Stock Screeners: Use the screener tool to filter stocks based on criteria like sector, market cap, and price-to-earnings ratio.
• Analyst Reports: Access evaluation notes and ratings from industry analysts.
• News and Updates: Stay informed of market trends and significant events affecting stock prices.

5. Understand Key Concepts

• Ticker Symbols: This is a unique series of letters assigned to a stock for trading purposes. For instance, Apple's ticker symbol is AAPL.
• Market Orders vs. Limit Orders:
  • Market Orders: Buy or sell immediately at the current market price.
  • Limit Orders: Buy or sell at a specified price or better, which is beneficial in volatile markets.
• Bid-Ask Spread: Learn how this difference between the highest bid and the lowest ask price can impact the cost of purchasing stock.

Placing a Stock Order with Fidelity

Now that you're equipped with the necessary knowledge, you can proceed to place an order.

6. Execute the Trade

• Log Into Your Account
• Navigate to the “Trade” Section: Select "Trade" from the account's main menu.
• Enter the Stock Details:
  • Input the stock's ticker symbol.
  • Choose the number of shares or the dollar amount you wish to purchase.
  • Select the order type (market or limit).

7. Review and Confirm

• Review Order Details: Check the order summary, including fees and total cost.
• Confirm the Order: Submit your order upon verification.
• Receive Confirmation: Fidelity will provide a confirmation that the order has been placed and processed. You can also review it in your transaction history.

Monitoring and Managing Your Investments

After purchasing stock, active management and monitoring are crucial for successful investing.

8. Diversify Your Portfolio

• Spread your investments across different sectors and asset classes to minimize risk.
• Rebalance your portfolio periodically to maintain your desired asset allocation.

9. Use Fidelity’s Tools for Tracking

• Alerts: Set up notifications for stock price changes or market news.
• Performance Reports: Review detailed performance analytics and compare them to benchmarks.
• Tax Documents: Efficiently manage tax obligations with tools that track gains and losses.

Leveraging Fidelity's Additional Services

Fidelity offers a range of additional services that can enhance your trading experience:

10. Explore Advanced Trading Platforms

• Active Trader Pro: Customize your trading experience with advanced charting and execution tools.
• Wealth Management Services: Access personalized advice and investment strategies.

11. Attend Educational Workshops

• Participate in workshops and webinars on investment strategies and market trends.
• Benefit from tutorials and guides, especially useful for novice investors.

12. Consider Mutual Funds and ETFs

• Mutual Funds: Diversified investment vehicles managed by professionals.
• ETFs (Exchange-Traded Funds): Traded like stocks, but offer diversification similar to mutual funds.

Common Questions About Buying Stocks with Fidelity

To further clarify the process, let's address some frequently asked questions.

FAQ

Q: What are the fees associated with buying stocks on Fidelity?

A: Fidelity offers commission-free trading on U.S stocks and ETFs. However, fees may apply for options trades and purchasing mutual funds.

Q: What is the minimum amount required to start investing with Fidelity?

A: There is no minimum for opening most of Fidelity's investment accounts, but you will need enough to cover the price of at least one share of any stock you wish to buy.

Q: Can I cancel a stock order once it’s placed on Fidelity?

A: You can cancel pending orders before they are executed. However, once an order is executed, it cannot be canceled.

Q: Does Fidelity offer fractional shares?

A: Yes, Fidelity allows you to buy fractional shares of stocks, permitting investments that match your budget without requiring the purchase of a whole share.

Final Thoughts

Investing in stocks through Fidelity can be a strategic way to build wealth over time. By setting up your account, leveraging research tools, and executing informed trades, you set the foundation for successful investing. With its array of services, Fidelity not only empowers its users with knowledge and tools but also offers a supportive environment for investors at all stages. As you grow more confident in your investment journey, don’t forget to explore the vast resources Fidelity provides, such as wealth management and educational workshops, ensuring your approach remains diversified and well-informed. Happy investing!