can i buy stocks by myself? A practical guide

Yes — retail investors can buy stocks by themselves using online brokerages, direct purchase plans, robo‑advisors, fractional‑share apps, or retirement/custodial accounts. This guide explains metho...

2025-12-29 16:00:00

By Blockchain Linguist

Article rating

4.6

108 ratings

Bitget offers a variety of ways to buy or sell popular cryptocurrencies. Buy now!

A welcome pack worth 6200 USDT for new users! Sign up now!

Can I Buy Stocks By Myself?

Yes — individuals can buy stocks on their own without a traditional full‑service broker by using online brokerages, direct purchase plans, or self‑directed investment platforms. This article explains how DIY stock buying works, the main channels you can use, step‑by‑step actions, order types, costs, tax and regulatory considerations, risks and common pitfalls, and when to consider professional help. If you are asking “can i buy stocks by myself”, read on for a clear, beginner‑friendly roadmap and a short practical checklist to get started.

Overview

“Buying stocks by yourself” means acting as a self‑directed retail investor. It contrasts with hiring a full‑service human broker who advises, trades and manages investments for a fee. When you buy stocks by yourself you typically:

Open and fund a brokerage or investment account.
Research companies or ETFs and choose what to buy.
Place your own orders and monitor holdings.

Common channels for DIY stock purchases include online/discount brokerages, direct stock purchase plans and dividend reinvestment plans (DSPPs/DRIPs), robo‑advisors or managed online platforms, mobile brokerage apps that support fractional shares, and buying within retirement or custodial accounts. Each channel offers a different balance of cost, control and convenience.

If you are wondering “can i buy stocks by myself”, the short answer is yes — and the rest of this guide explains which route fits which needs.

Why People Choose to Buy Stocks Themselves

Many people choose DIY investing for clear reasons:

Lower trading and advisory costs compared with full‑service brokers.
Full control over which individual stocks, ETFs or funds to hold.
Educational value: hands‑on experience builds investing knowledge.
Flexibility such as fractional shares, recurring investments and instant reallocation.

There are tradeoffs. Self‑directed investing requires time, basic financial knowledge and emotional discipline. You also assume execution, recordkeeping and tax responsibilities that a full‑service provider might handle.

Main Ways to Buy Stocks Without a Full‑Service Broker

Online/Discount Brokerages

These firms let you open an individual taxable account or retirement account and place trades electronically. They execute your buy and sell orders, provide market data, research tools and account statements. Many retail brokerages offer commission‑free trading for listed equities in major markets.

Advantages:

Low or zero commissions on many stock trades.
Broad product access (stocks, ETFs, bonds, options, mutual funds).
Advanced order tools for experienced traders.

Considerations:

Compare fee schedules, account minimums and the quality of research and customer support.
Check regulatory protections such as SIPC coverage and whether the broker is a member of industry regulators.

Direct Stock Purchase Plans (DSPPs) and Dividend Reinvestment Plans (DRIPs)

Some companies let investors buy shares directly from the issuer through DSPPs. DRIPs allow automatic reinvestment of dividends into additional shares. Costs are often low, and DRIPs can support dollar‑cost averaging.

Limitations:

Only available for participating companies.
May have small fees and limited trading flexibility compared with brokerages.

Robo‑Advisors and Managed Online Platforms

Robo‑advisors provide automated portfolios based on your risk profile. They buy and manage ETFs or diversified portfolios for you. This is a hybrid option: you avoid a full human advisor but delegate day‑to‑day portfolio management.

Good for investors who want low‑cost delegation and automatic rebalancing. Less suitable if you want to hand‑pick individual stocks frequently.

Brokerage Apps and Fractional‑share Platforms

Mobile apps designed for beginners often offer fractional shares, recurring buys and simple interfaces. Fractional shares let you buy part of an expensive stock with small amounts of cash.

These platforms lower the money barrier to entry and make portfolio diversification from modest capital easier.

Buying via Retirement or Custodial Accounts

You can buy stocks inside tax‑advantaged accounts such as IRAs or a brokerage window inside an employer 401(k). Custodial accounts allow adults to manage assets for minors.

Special rules apply for contribution limits, tax treatment and withdrawals. For retirement goals, buying within an IRA may be preferable taxwise compared with a taxable account.

Step‑by‑Step Process to Buy Stocks by Yourself

Decide investment goals and risk tolerance

Start with goals, time horizon and how much risk you can tolerate. Short‑term goals require lower volatility investments. Long horizons permit larger allocations to growth stocks. Define whether you prioritize income, growth, capital preservation or speculation.

Diversify across sectors and asset classes to reduce company‑specific risk. Set a plan for how much you will invest regularly and how you will react to market moves.

Choose a brokerage/platform

Deciding which platform to use is one of the most important steps. Key decision factors:

Fees and commissions.
Available products (stocks, ETFs, options, mutual funds, bonds).
Account types (taxable, IRA, custodial, trusts).
Trading tools, research and educational content.
Mobile user experience and ease of placing orders.
Customer service and dispute resolution.
Regulatory protections such as SIPC coverage and membership in industry regulators.

Compare fee schedules and confirm any account minimums. If you plan to trade on margin or use options, check margin rates and options fees.

Open and fund an account

Typical steps:

Complete an online application with ID and tax ID (for U.S. accounts: Social Security Number or Tax Identification Number).
Provide personal information, employment and financial details as required for regulatory reasons.
Verify identity and fund the account via bank transfer, wire or check. New accounts may have funding holds before trades can settle.

Settlement timing differs by jurisdiction. In many U.S. markets, equity trades settle on a T+2 basis (trade date plus two business days). Some jurisdictions now use T+1.

Research and select securities

Basic research steps:

Review company fundamentals: revenue, earnings, balance sheet and cash flow.
Examine valuation metrics such as price‑to‑earnings and price‑to‑sales, but use them in context.
Consider qualitative factors: industry dynamics, management quality and competitive advantages.
For diversified exposure, evaluate ETFs and index funds by tracking error and expense ratios.

Be cautious about tips from social media or speculative sources. Cross‑check facts with official filings and reputable research.

Place an order (how orders work)

To buy, enter an order with the ticker symbol, quantity and order type. Common order types are explained below. After execution, you’ll receive a trade confirmation showing fills, price and commissions (if any).

Understand order routing and execution quality. Some brokers route orders to market makers which can affect execution price. Check your broker’s disclosures and execution quality reports.

Monitor, recordkeeping, and rebalancing

Track your holdings and save confirmations for tax reporting. Keep records of purchase dates, costs and reinvested dividends for accurate cost basis.

Review portfolio performance and rebalance periodically to maintain target allocations. Rebalancing helps control risk by selling high and buying underweight positions.

Order Types and Execution Details

Order types let you control how and when a trade executes. Key types:

Market order: Executes immediately at the best available current price. Use for quick execution, but you accept the market price and possible slippage.
Limit order: Sets a maximum (buy) or minimum (sell) price. The order executes only at that price or better. Use to control execution price; risk is non‑execution.
Stop order (stop‑loss): Becomes a market order once the stop price is reached. Useful to limit losses but can trigger at an unfavorable price during fast moves.
Stop‑limit order: Becomes a limit order when the stop price is hit. It prevents execution at worse prices but can fail to fill.
Conditional orders: Execute only if specified conditions are met (e.g., OCO — one cancels the other).

Execution risks:

Slippage: Difference between expected and executed price, common in volatile or illiquid stocks.
Partial fills: Large orders can be filled in pieces, leaving the remainder unfilled until market depth permits.

Know how your broker handles fractional shares, odd‑lot orders and after‑hours trading.

Costs, Fees, and Other Practical Considerations

Even when headline commissions are $0, there are other costs:

Commissions: Many brokers offer $0 commissions for listed U.S. equities, but confirm for other products.
Margin interest: If you borrow to trade, margin rates apply and can be significant.
Options and mutual fund fees: Options contracts often carry per‑contract fees; mutual funds can have purchase or redemption fees.
Spread: The bid‑ask spread is an implicit trading cost, especially for thinly traded stocks.
Account fees: Some brokers charge inactivity, account maintenance or custodial fees.
ETF expense ratios: Ongoing management fees erode returns over time.
Transfer or ACAT fees: Moving an account between brokers can incur fees.
Payment for order flow: Some brokers accept payment for routing orders to market makers. This can affect execution quality and is disclosed in broker reports.

Always read the broker’s fee schedule and disclosures. Hidden costs can materially affect long‑term returns.

Tax and Regulatory Considerations

Tax rules vary by country. The summary below is U.S.‑centric and for general guidance only.

Taxable events: Selling a stock for a gain, receiving dividends, and selling mutual funds or ETFs can create taxable events.
Capital gains: Short‑term gains (assets held one year or less) are taxed at ordinary income rates. Long‑term gains (held more than one year) typically benefit from preferential rates.
Dividends: Qualified dividends may be taxed at long‑term capital gains rates, while non‑qualified dividends are taxed as ordinary income.
Cost basis and recordkeeping: Keep accurate records of purchase prices, reinvested dividends and splits to calculate taxable gains.
Tax‑advantaged accounts: IRAs and certain retirement accounts grow tax‑deferred or tax‑free depending on the account type. Withdrawals from pre‑tax accounts have tax implications.
Regulatory protections: In the U.S., FINRA and the SEC provide oversight. SIPC protects against broker insolvency up to stated limits but does not protect against market losses.

This is not tax advice. For personalized guidance, consult a tax professional.

As an example of how taxes and retirement planning intersect with stock decisions: 截至 2025 年，据 MarketWatch 报道，一位接近退休的读者正在考虑分阶段将 401(k) 转换为 Roth 账户以减少未来的必需最低分配。该报道指出，逐年进行有限度的 Roth 转换可以帮助管理未来税务与医疗补贴资格，但过度转换可能推高当年应税收入并影响医疗补贴资格。该案例提醒读者在买卖、转换或从投资账户取款时同时考虑税务和福利影响。

Risks and Common Pitfalls for DIY Investors

Principal risks:

Market volatility: Prices can move sharply and quickly. Expect drawdowns.
Concentration risk: Holding too much in one stock increases idiosyncratic risk.
Emotional trading: Fear and greed can lead to buying high and selling low.
Misinformation: Social media tips and unverified rumors can cause poor decisions.
Platform outages: Temporary trading halts or broker service problems can affect execution.
Security risks: Weak passwords, reused credentials and phishing can jeopardize accounts.
Underestimating taxes and fees: Ignoring tax consequences and hidden fees can reduce net returns.

Mitigation tips:

Diversify across assets and sectors.
Use limit orders for large or illiquid positions.
Keep an emergency cash buffer to avoid forced selling.
Maintain strong account security: unique passwords, two‑factor authentication and regular reviews.
Educate yourself and verify information from primary sources such as company filings and official regulator guidance.

Benefits of Self‑Directed Investing

Advantages include:

Control over holdings and trading timing.
Lower ongoing advisory fees compared with full‑service arrangements.
Flexibility to use new tools, fractional shares and recurring buys.
Faster execution and immediate decision making.
Educational benefits that improve long‑term financial literacy.

For many investors, DIY investing can be a cost‑effective and empowering way to build wealth when paired with careful planning and risk management.

When to Consider Professional Help or Alternatives

Professional help may be preferable when:

You have complex tax situations, large portfolios or estate planning concerns.
You want comprehensive financial planning beyond investments (tax planning, insurance, estate plans).
You lack the time or willingness to monitor markets and maintain discipline.
You prefer personalized advice and human accountability.

Alternatives include registered investment advisors (RIAs), certified financial planners (CFPs), or managed accounts and wealth managers. If you want partial delegation but lower cost, consider a robo‑advisor.

Practical Checklist (Quick Start)

Set clear financial goals and choose an investment time horizon.
Decide account type: taxable, IRA, or custodial.
Compare brokerages for fees, product access and regulatory protections.
Open and verify your account with ID and tax ID.
Fund the account and confirm settlement rules.
Place a small first trade to learn the platform and confirm order handling.
Save trade confirmations and maintain tax records for cost basis calculations.
Review and rebalance periodically to maintain allocations.

Frequently Asked Questions

Q: Do I need a broker?

A: If you want to buy publicly listed stocks you need an intermediary that can execute trades on your behalf. That is typically an online brokerage or a direct purchase plan. If you ask “can i buy stocks by myself”, the answer is yes — but you still use a platform that acts as the broker of record.

Q: How much money do I need to start?

A: You can start with very small amounts thanks to fractional shares and no‑minimum broker accounts. The practical minimum depends on your goals and whether you want diversification. Many beginners start with monthly automatic investments from tens to a few hundred dollars.

Q: Can I buy fractional shares?

A: Yes, many modern brokerage apps and platforms support fractional shares for major listed equities and ETFs. Fractional investing lowers the barrier to owning expensive stocks.

Q: Are online brokerages safe?

A: Reputable brokerages are regulated and provide protections such as SIPC insurance in the U.S. Account security depends on the firm’s safeguards and your own security practices (strong passwords, 2FA). Verify licensing and regulatory disclosures before opening an account.

Q: How are dividends taxed?

A: Tax treatment depends on whether dividends are qualified or non‑qualified and on your jurisdiction. Qualified dividends may be taxed at lower capital gains rates in the U.S., while non‑qualified dividends are taxed as ordinary income. Keep records and consult a tax professional.

References

Investor education pages and step‑by‑step broker guides.
Regulatory guidance from FINRA and the SEC on account protections and order handling.
ETF and mutual fund issuer education pages (expense ratios, tracking methodology).
Publicly available explainers on tax treatment of dividends and capital gains.
截至 2025 年，据 MarketWatch 报道（读者信件与理财建议专栏），个别退休规划案例讨论了逐年 Roth 转换、搬迁以降低州税和在 60–70 岁间的收入与福利策略，该报道用于说明税务与投资决策如何互相影响。

(Article compiled from brokerage help pages, regulator investor education materials and mainstream personal‑finance explainers for accuracy and practical guidance.)

Ready to start? If you decide to explore self‑directed investing, follow the quick checklist above and consider testing small recurring buys to learn the process. For Web3 tools or to broaden your investing knowledge with supplementary materials, explore Bitget’s educational resources and Bitget Wallet for secure custody of digital assets.

The content above has been sourced from the internet and generated using AI. For high-quality content, please visit Bitget Academy.