Where Do I Start? How Do I Choose and Purchase a Stock?

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In today's edition, Fool analyst Austin Smith answers a question posed by a Foolish fan: "Where do I start? How do I choose and purchase a stock?" Austin defers to the proven Peter Lynch model of buying what you know. This means investing in companies that you personally understand with relatively transparent business models. Some popular stocks for beginning investors that have easy-to-comprehend business drivers include McDonald's, Starbucks, and Coca-Cola. Once you've identified the stock you're committed to, you can open a brokerage account. Austin provides some popular companies as examples. You'll want the company's ticker symbol as well, which can be easily found at websites such as finance.yahoo.com, or google.com/finance, and the number of shares you'd like to buy. Armed with these things, you can easily call your broker or use their online interface to place a trade for the number of shares you'd like.

One of the best stocks for an early investor to pick up are those that pay a steady dividend. These are small, regular payments that can build wealth over the long run. You can learn about nine rock-solid dividends in our special free report by clicking here

At the time this article was published Austin Smith owns shares of McDonald's and The Coca-Cola Co. The Motley Fool owns shares of The Coca-Cola Co. and Starbucks. Motley Fool newsletter services recommend McDonald's, Starbucks, and The Coca-Cola Co. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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