Brokerage Account

• If you plan to buy individual stocks, you need to have a brokerage account in place. If you need investment advice and guidance, as well as access to easy trading, a full-service firm is probably the most suitable choice. You will pay more for your trades, but you will also have access to investment advice and help in choosing the right stocks. If you prefer to make your own investment decisions, you can save a lot of money by choosing an online discount broker instead. You will not have the same level of advice and guidance, but you will be able to trade for as little as $10 per transaction.
  
  

Mutual Funds

• One of the most important concepts for stock market investors is diversification. If you are a small investor with limited funds, it can be hard to build the kind of diversified portfolio you need, but mutual funds provide an attractive alternative. Instead of holding a handful of individual stocks, you can own hundreds of different stocks through a well diversified mutual fund. You need to research those funds carefully to choose one that offers historically good performance and low costs, but a mutual fund can be a viable alternative to buying individual stocks through a broker.
  
  

Employee Stock Purchase Plans

• The company you work for might provide a very convenient way for you to get started in the stock market. Many companies allow their workers to accumulate shares of company stock through payroll deduction, making it easy for those workers to invest in the future of the firm. If you have an employee stock purchase plan available, you can divert 1 to 10 percent of your gross pay and use it to buy shares of company stock. With these plans you typically do not pay a brokerage commission, and some plans even offer a discount from the market price of the stock.
  
  

Direct Stock Purchase Plans

• Some companies allow investors to buy shares in their firms directly, without using a broker or paying a brokerage commission. These direct stock purchase plans provide a convenient way for investors, especially small investors, to get started in the stock market. You should not, however, invest in a stock solely because it offers a direct stock purchase plan. You still need to do your homework and evaluate each company based on its merits, whether or not you can purchase shares in the company directly.