MONEY MADE SIMPLE | How to buy your first stock



As apprehension grips the world amid the COVID-19 coronavirus pandemic, the stock market is no exception to industries with worrying volatility. Furthermore, September and October are historically the weakest months during election years, according to LPL Research, as investors prepare for an uncertain presidential election. 
Despite all this, understanding the basics of stocks during this adversity is crucial to take your first step into investing once the market starts to resemble a steady state.
What Stock Is
Stocks represent an ownership share of a company. When you buy a stock, you become part owner of the company—maybe only a very small part, but you are still an owner. 
Before Buying Stocks
Make sure to research as much information as you can. Look for trends in a company’s earnings growth: if it generally increases over time, the company is probably worth investing in. The price-earnings (P/E) ratio offers a measure of how expensive a stock is. To find the P/E ratio, divide the current share price by its earnings per share. Lastly, look for companies that pay modest but regular and increasing dividends over time.
Start a Brokerage Account
A brokerage account is an investment account you can use to buy stocks. You can open one through an investment company, then fund the account by transferring money from your checking or savings account. 
Between using a managed and online brokerage account, many choose the latter option—which allows you to open an account at no cost and to operate your own investments. Interactive Brokers is a good online brokerage platform for non-US residents. A managed account includes assistance from a human advisor or a robo-advisor.
How to Earn Money Investing in Stocks
There are two ways to earn money when you invest in stock: price appreciation and dividends. Price appreciation is when a stock increases in value because the demand has increased. You will earn a profit when you sell stock that has appreciated. 
A dividend is a payment made by companies as a reward to investors for putting their money into the venture. Large companies tend to issue regular dividends (monthly, quarterly or annually) because they seek to maximize shareholder wealth in ways aside from normal growth.