02/09/2026
HOW TO START IVESTING
Where You Buy Stocks
To invest in the stock market, the first step is opening an account with a stockbroker. This is simply the platform that lets you buy and sell investments.
Established US brokers include Schwab, Fidelity, Vanguard, E*Trade, Ally Invest, and Interactive Brokers. These are solid, long-standing firms with broad investment options.
Newer platforms often appeal to younger investors because they feel simpler and more modern. Examples include Robinhood, WeBull, and Cash App Investing.
If you prefer a mostly passive style where you set rules and let the system do the work, platforms like M1 Finance and Stash are good fits.
For a completely hands-off experience, robo-advisors such as Betterment, Wealthfront, and Acorns automatically build and manage portfolios for you.
TYPES OF INVESTMENT Accounts
Taxable Brokerage Account
This can be opened individually or jointly.
You pay taxes on dividends and on capital gains when you sell investments.
Roth IRA
Your money grows tax-free.
Qualified withdrawals in retirement are also tax-free.
Traditional IRA
Contributions may be tax-deductible.
Withdrawals are taxed as regular income.
Health Savings Account HSA
Contributions are tax-deductible.
Growth and qualified medical withdrawals are tax-free.
After age 65, it can function similarly to a Traditional IRA.
Employer-Sponsored Retirement Plans
401k
Can be pre-tax, Roth, or both.
Many employers offer a match, which is free money.
Contribution limit is $23,500 plus a $7,500 catch-up if you are 50 or older.
457b
Often available to government and nonprofit employees.
Can be pre-tax or Roth.
No early withdrawal penalty before age 59½.
You can contribute to both a 401k and a 457b, up to $23,500 in each.
Accounts for Business Owners and the Self-Employed
SEP IRA
Contributions are tax-deductible.
High contribution limit up to 25 percent of income, capped at $70,000.
Well suited for sole proprietors and small businesses.
Solo 401k
Allows contributions as both employee and employer.
Total annual limit is $70,000 plus a $7,500 catch-up if 50 or older.
Roth contributions are allowed, unlike a SEP IRA.
Important notes
Every tax-advantaged account has eligibility rules, always confirm before opening one.
HSAs are only offered through certain brokers such as Fidelity, Schwab, and HSA Bank.
Types of Investments You Can Buy
Through most brokers, you can invest in
Stocks
Bonds
ETFs
Mutual funds
Stocks and ETFs usually trade without transaction fees.
Mutual funds may charge transaction fees depending on the broker.
Important notes
Check whether a mutual fund is labeled NTF meaning no transaction fee.
Avoid holding mutual funds in taxable brokerage accounts when possible.
Platforms like Robinhood, WeBull, and M1 Finance do not support mutual funds.
Choosing What to Invest In
Building Your Own Stock Portfolio
This approach requires research, discipline, and time.
Diversification is essential to reduce risk tied to individual companies or sectors.
Investing Through Funds
A simpler option is using investment funds such as ETFs or mutual funds.
Funds hold many stocks at once, making diversification easier.
For example, S&P 500 funds invest in the 500 largest US companies.
Popular ETF options include VOO, IVV, SPLG, and SPY.
Mutual fund versions are available from Vanguard, Fidelity, and Schwab.
Fixed Income and Conservative Options
Bond ETFs like BND and AGG focus on investment-grade debt.
Short-term government bond ETFs include SHY and VGSH.
Cash-like ETFs such as BIL and SGOV aim to preserve capital with low volatility.
Important notes
Market-cap weighted funds are heavily concentrated in their largest companies.
Lower-quality bonds and municipal bonds are offered through separate funds.
The Core Portfolio Approach
Start simple.
A solid foundation usually includes two or three broad, low-cost funds covering
US stocks
International stocks
Bonds
Your allocation should depend on
How long you plan to invest
Your risk tolerance
How much capital you are starting with
Invest regularly using dollar-cost averaging to reduce timing risk.
Many brokers allow fractional share purchases, which helps when prices are high.
This feature is available at Fidelity, Schwab, Interactive Brokers, M1 Finance, Stash, WeBull, and Robinhood.
Final Considerations
Before investing, build an emergency fund covering six to nine months of expenses.
Be honest about your risk tolerance and your ability to stay calm during downturns.
Markets can and do fall 10 percent, 20 percent, even 50 percent at times.
