When it comes to actually going into your stock account and buying the actual stock, there’s a few little things that you need to note.
- Make Sure the Market is Open = note that stock markets aren’t open 24/7, they have specific business hours. Currently, in Australian time, the Aussie market is open 10-4pm AEST, the European markets are 5pm-1am, and the US markets are 11:30pm-6am. These hours will change in daylight savings, so watch out.
- Double-Check the Stock Symbol = this may seem ridiculous but a lot of people get complacent when they’re buying stocks and end up buying the wrong one. When a hot stock is flying, a stock with a similar name or symbol usually gets a decent bump also because that many people accidentally buy the wrong one. It happened just recently with Tesla and Tulsa, some random UK pharmaceutical company.
- Buy the Stock, Not the Bond = on the US stock accounts they have stocks and bonds. Bonds are a company’s debt, but don’t worry about that. Just make sure that you’re buying a company’s stock, not their bond. It’ll come up with the different options when you search the company symbol.
- Double-Check the Stock Class = some stocks have what are called class structures whereby there is a class A, B and/or C stock. The difference between them is usually voting power, with higher-class ones having more voting power than lower-class ones. But note that the stock class with voting power is always more expensive, so you have to pay for this power, it isn’t free. As an individual investor we aren’t buying enough shares to have any power anyways, so buy the lowest class stock. Some examples include; Under Armour (buy Class C), Lionsgate (buy Class B).
- Buy at the Market Price = so now that we’ve selected the right stock and all, it’s time to go through with the purchase. When it comes to selecting the stock price you want to buy at, they give you a few options:
- Ask = the current price being asked by people who want to sell the stock.
- Bid = the current price being offered by people who want to buy the stock.
- Mid = the middle of the ask and mid price. This is offered by some stock accounts to help you buy the stock below the asking price, but jump ahead of the bidding price.
- You never want to miss out on a stock you want because you were too stingy to pay a few extra cents for it. What if the stock ran only higher from that point on and you missed the whole thing for a few cents. I suggest you just buy it at the asking price – this will guarantee your purchase of the stock.