1. Before you decide on buying stocks, you must already have an idea of what you are interested in. Do research first. You should choose your stocks with care as the stock market may crash anytime. Look for a stable company so that you can be assured that your money will not be relatively safe.

2. Engage the services of a broker. Brokers are more knowledgeable on how to buy stocks. You have three choices when it comes to brokers: Full service brokers, Discount brokers and Online brokers. Actually, they are all the same. They only differ from each other in terms of the price they charge and the advice that they provide. Full Service brokers charge you by getting a portion or a commission; a certain percentage of your purchase. Discount brokers charge US$10 to US$20 for every trade of 1,000 shares or less. On the average, discount brokers charge an amount that is 1/3 of that of Full service brokers. Online brokers charge US$9 to US$15 for every transaction.

3. Be ready for some technical terms or jargon that the brokers may ask you. Since they know how to buy stocks very well, you should anticipate questions like “Market or limit order?” and “Day only or good ‘till cancelled?” So to translate: when placing an order to your broker, if you choose a market order, you are saying that you want to purchase a stock regardless of whatever happens to the prevailing price of that stock. A limit order on the other hand lets you set a specific price that you are able and willing to pay. Your order will be automatically filled once the stock dips down to that level. Limit orders can either be for one day only or indefinitely or good until it is cancelled.

4. After buying a stock, you can tell your broker to sell it if the price goes down to a certain level that you have specified. This is also known as stop loss order which can be likened to an insurance since you’ll never lose more than the amount you specified no matter what happens to the price of the stock.

Ultimately, knowing how to buy stocks will not save you from losing money. Considering the state of America’s economy today, you should think twice before deciding on buying a stock from a certain company. Most companies are closing nowadays, laying off workers and declaring bankruptcy. There are still some companies that still stand strong despite the economic crisis. But the bottom line is, are you willing to gamble in these tough economic times?