What's the Cheapest Way to Research and Buy Stock? (2024)

If you have the right know-how, trading can be a very lucrative and profitable business. But even the most seasoned investor can benefit from saving a few dollars here and there—especially when it comes to fees and commissions.

There is a huge range of service providers investors can use to get investment research and execute trades in a cost-effective and timely manner. Some information providers are free, while others are subscription-based.

Key Takeaways

  • With the surplus of information available online, anyone can research and become more knowledgeable about investing.
  • Start the research process by accessing information from financial news websites, and the online arm of financial firms or investment hubs.
  • Discount online brokers are typically low cost, while the full-service brokers are pricier but often provide more guidance for investors.
  • Direct stock purchase plans (DSPPs) let you buy stock directly from a firm without a broker; they are often a comparatively inexpensive option.
  • If you buy stocks that pay dividends, resist the urge to take them in cash; instead, opt for the company'sdividend reinvestment program (DRIP).

Start With the Basics

Websites such as Investopedia and Yahoo Finance provide investors with a vast array of free stock information such as company financial statements, key earnings ratios, and recent company news. This "raw data,"however, is only useful if the investor is knowledgeable in what the information is conveying. For example, knowing a company's P/E ratio is only useful if the investor understands the ratio's underlying concept.

There are many variables to weigh when considering stock buys and the decision-making process can be complex. Due to the sheer volume and complexity of this raw data, subscription-based advisory andanalyst services can be extremely useful because they help disseminate and analyze raw data for investors. These types of services provide market analysis as well as potential stock picks based on their analyses of a wide range of companies and industries.

Educated Stock Executions

The most inexpensive way to purchase company shares is through a discount broker. A discount broker provides little financial advice, while the more expensive full-service broker provides comprehensive services like advice on stock selections and financial planning. If you use some of the free information sources or subscription-based analysis services in combination with the discount broker, it is possible to keep costs relatively low.

The more you educate yourself about the financial world, the less you will have to rely on investment advisors or full-service brokers. The more comfortable investors are with the stock market, the greater the benefit from going with a discount broker or online broker such as Charles Schwab and E*Trade, where fees $0 per trade for stocks and ETFs and $0.65 for options. That's compared to full-service brokers where fees can subtract thousands from potential returns. And lower commissions means you'll have more money to invest.

Company Purchase Plans

If you're looking for a cheap and easy way to buy stock, consider direct stock purchase plans (DSPPs). These plans let you buy stock directly from the company without the need for a broker. The best part is that they often come with low fees and your purchases may even come at a discount. This is a great option for novice or first-time investors because the minimum deposit can be as little as $100, depending on the company.

A few things to keep in mind though. When you make a purchase through a DSPP, you sign up for monthly deposits. That means you forfeit any control over the prices at which the trades are made. You may end up getting a lower number of shares if the company's stock is trading higher.

Secondly, you may be required to use the services of a broker if and when you decide to sell your shares. That means you'll have to cough up a commission fee at some point. And if you're looking for diversification, you'll want to enroll in a few different plans.

Whether it's a broker, an app, or anything else, be sure to do your research to see if the investing platform you've picked is right for you.

Reinvest Those Dividends

If you invest in stocks that pay back dividends, make sure you enroll in the company's dividend reinvestment program (DRIP)—no matter how alluring it may be to take them in cash. By taking part in the DRIP, you're putting what you're earning back in to buy more shares. And most plans will either charge you a very small fee—some cost nothing at all. Consider the fact that typical companies pay out dividends four times a year. So reinvesting them at little to no commission is a pretty sweet deal.

Signing up for a brokerage account, an app or direct purchase plan may help, but your best bet is to do your own research: you're in charge of your money, and only you know how much you have to invest, your risk tolerance, and your goals.

New Technology

Since you can do pretty much anything with a smartphone or tablet, why not buy and sell stocks with it, too? There are a variety of apps available that allow traders to do business for free or on the cheap.

Robinhood is an app that gives traders access to stocks and ETFs with no commission, even options. There is also free real-time data and execution of trades is relatively quick. You can also trade on a margin account, but that comes with a floating rate fee partly based on the Federal Funds Target Rate. But since you're getting a pretty no-frills service, you should know you won't get access to the research or other tools a traditional brokerage service provides.

M1 Finance offers an app as well as a desktop platform. It has two different subscription services. The free, standard service comes with a variety of frills including an investment account, two daily trades and the ability to trade fractional shares.

You can also build a custom portfolio with M1 Finance, or you can choose from one of 60 expert portfolios. The other option costs $10 a month month or $95 a year. It comes with the same perks as the standard account with a few extras, like bigger cash back rewards and lower loan rates. The catch to trade twice a day is a $25,000 minimum portfolio balance, to comply with pattern-day trading regulations.

What's the Cheapest Way to Research and Buy Stock? (2024)


What's the Cheapest Way to Research and Buy Stock? ›

A discount broker is a cheaper option that provides basic execution services for investors who do their own research and analysis. Today, many online brokers offer commission-free trading along with free tools and screeners, making it easier than ever to trade stocks on your own.

What is the cheapest way to buy stock? ›

The most inexpensive way to purchase company shares is through a discount broker. A discount broker provides little financial advice, while the more expensive full-service broker provides comprehensive services like advice on stock selections and financial planning.

How to research what stocks to buy? ›

Six ways to research a stock before you buy
  1. Look at what the company does and how it generates revenue. ...
  2. Check out its financials. ...
  3. Use price charts to spot important trends. ...
  4. Monitor the stock. ...
  5. Look beyond the numbers. ...
  6. Hear what the experts have to say.

What makes a stock cheap? ›

The low-priced stocks come with a lower P/E ratio which means the investor has to pay less money to buy stocks of a particular company. Due to this reason, low-priced stocks capture the attention of investors, and high-priced stocks fail to do so. Volatility means fluctuating the average price of the stock.

How to identify stocks to buy? ›

  1. How to Pick a Stock.
  2. Determine Your Goals.
  3. 3 Types of Investors.
  4. The Diversified Portfolio.
  5. Keep Your Eyes Open.
  6. The "Story" Behind a Stock Pick.
  7. Find Your Companies.
  8. Tune-in to Corporate Presentations.

Is there a free way to buy stocks? ›

Robinhood provides free stock, options, ETF and cryptocurrency trades, and its account minimum is $0, too.

What is the best trading platform for stocks? ›

The best online brokers for stocks in May 2024:
  • Charles Schwab.
  • Fidelity Investments.
  • Robinhood.
  • E-Trade.
  • Interactive Brokers.
  • Merrill Edge.
  • Ally Invest.
  • Tastytrade.

How to research stocks for beginners? ›

4 steps to research stocks
  1. Gather your stock research materials. Start by reviewing the company's financials. ...
  2. Narrow your focus. These financial reports contain a ton of numbers and it's easy to get bogged down. ...
  3. Turn to qualitative stock research. ...
  4. Put your stock research into context.
Feb 22, 2024

How to analyze stocks for beginners? ›

There are a few aspects to consider when you wish to determine whether a share is worth investing in. The company's fundamentals: Research the company's performance in the last five years, including figures like earnings per share, price to book ratio, price to earnings ratio, dividend, return on equity, etc.

How to research stocks for day trading? ›

Typically, the best day trading stocks have the following characteristics:
  1. Good volume. Day traders like stocks because they're liquid, meaning they trade often and in high volume. ...
  2. Some volatility — but not too much. Volatility means the security's price changes frequently. ...
  3. Familiarity. ...
  4. Newsworthiness.
Jan 3, 2024

How do I know if a stock will go up the next day? ›

Some of the common indicators that predict stock prices include Moving Averages, Relative Strength Index (RSI), Bollinger Bands, and MACD (Moving Average Convergence Divergence). These indicators help traders and investors gauge trends, momentum, and potential reversal points in stock prices.

Which stock market gives the highest returns? ›

Key Takeaways. The U.S. stock market is considered to offer the highest investment returns over time. Higher returns, however, come with higher risk.

What stock has the lowest share price? ›

low price shares
S.No.NameCMP Rs.
1.HB Stockholdings114.20
2.Taparia Tools4.27
3.LKP Finance131.60
4.Sumedha Fiscal55.25
23 more rows

What is the formula for picking stocks? ›

P/E Ratio – The P/E ratio is a calculation that evaluates a stocks relative performance and value. It is computed by dividing the stock's price by the company's per share earnings for the most recent four quarters.

How do I choose which stock to buy for beginners? ›

The company's revenue growth, profitability, debt levels, return on equity, position within its industry and the health of its industry are all metrics you should consider prior to making an investment, Sahagian says.

What are the top 10 stocks to buy right now? ›

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Company (ticker)Analysts' consensus recommendation scoreAnalysts' consensus recommendation
Amazon.com (AMZN)1.29Strong Buy
Nvidia (NVDA)1.33Strong Buy
Microsoft (MSFT)1.33Strong Buy
Bio-Techne (TECH)1.39Strong Buy
21 more rows

Can you buy a stock with $1? ›

With fractional share trading, you can still invest in that company without spending the full $50—even if you invest $1 or $5, you still own a piece. Over time, as you have more cash available you can buy additional stock to build your investment portfolio even more.

How much money do I need to invest to make $1000 a month? ›

A stock portfolio focused on dividends can generate $1,000 per month or more in perpetual passive income, Mircea Iosif wrote on Medium. “For example, at a 4% dividend yield, you would need a portfolio worth $300,000.

What is the best stock under $1? ›

Penny stocks to buy under $1
  • $Meten(METX.US)$
  • $Exela Technologies(XELA.US)$
  • $ProQR Therapeutics(PRQR.US)$
  • $Cybin(CYBN.US)$
  • $Statera Biopharma(STAB.US)$
  • $Sonnet BioTherapeutic(SONN.US)$
  • $Artelo Biosciences(ARTL.US)$

What is the best $1 stock to buy? ›

Stocks Under $1 at a Glance
Penny StockCode
Pharma-Bio ServeOTCMKTS: PBSVVisit Webull to buy
CompugenNASDAQ: CGENVisit Robinhood to buy
Akebia TherapeuticsNASDAQ: AKBAVisit Fidelity to buy
Wearable Devices LtdNASDAQ: WLDSVisit Webull to buy
6 more rows

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