X
What are stocks and how do I invest in them?
By Hiren Amin, Read bio | Updated on July 30, 2026
Summary
Stock investing can become more approachable when you understand the basics. Here are some of the key things you need to know about buying and selling.
This article is a step-by-step guide on how to get started investing in stocks, how to choose an online broker, and what to know before you enter the stock market—so you can make well-informed decisions and invest in the stock market with confidence.
Here’s what you’ll learn:
Table of Contents
Get started with TD EasyTrade™
Get started with TD Direct Investing
We've all heard stories of people who've paid off their mortgage, bought their dream car, or funded their child's education thanks to a well-timed stock market investment. But before you start investing, it's important to understand what you're getting into. What works for everyone else might not work for you. That's because every investor is unique, with different goals, timelines, and risk profiles.
How do I start investing in stocks?
When it comes to investing in the stock market, there's no such thing as the perfect approach. Each investor is unique and has their own investment style based on their current financial situation, individual preferences, and willingness to take financial risks. To shape your personal investment strategy as a self-directed investor, start by considering a few key factors.
Figure out your goals: A clear understanding of why you want to invest in the first place will help you to set specific goals. It's helpful to think about how much you want to make and by when. Are you investing for the short or long term? Are you saving for a down payment? Or are you investing for future use, like your retirement? Take a more goal-oriented approach to investing by answering these questions based on your own timeframe and financial goals.
Identify your investor profile: Investing in stocks comes with a certain amount of risk. Your risk tolerance (how much risk you can reasonably take on) and your time horizon (when you need to access your money) will define your investor profile. A conservative investor may prioritize preservation of capital and lower volatility, while an aggressive investor may accept higher volatility and a greater risk of loss in pursuit of higher expected returns.A moderate investor falls somewhere in the middle; they may seek a balance between growth potential and capital preservation.
Remember, even the most conservative approach can lead to some capital loss. Nothing is guaranteed when investing in stocks.
Set your budget: Try to create a realistic budget before you invest in stocks. Consider using your after-tax income as a measure so you know exactly how much money you have to invest. Other things to consider are your regular expenses, overall debt, and time horizon (the total length of time you plan to keep your money invested in stocks before withdrawing the funds).
Open an account with a discount brokerage: An online brokerage, also referred to as a discount brokerage, can carry out buy or sell orders with little or no commissions. Before you can start investing, you need to open a self-directed account.
How do I choose an online broker?
The popularity of stock market investing has led to a proliferation of discount brokers. Here's what to consider when selecting an online broker.
Platform capabilities: Beginners may want to look for a platform with an intuitive interface.Look for one with advanced features and capabilities you can access as you gain investing experience. An investing app that allows you to trade on the go can also be beneficial.
Account minimums: Does the brokerage require you to deposit a certain amount of money just to open an account? Make sure you read the fine print to ensure you understand all the costs involved.
Fees and commissions: Some online brokerages charge a monthly fee for using the platform. You may also be charged for using research tools and other features. Brokerages also charge commissions—a fixed transaction cost charged for executing each trade. Commissions for trading can range from $0 to $10 per trade. To learn more review the applicable fee schedule.
When selecting an online broker, consider platforms that offer you the tools you will need as an investor. If you are interested in investing in U.S. stocks, compare how different platforms handle currency conversion, foreign-exchange spreads, and U.S. dollar account features. The platform should also let you hold both Canadian and U.S. dollars in your account so you can build investment plans that align with your goals. Consider mobile apps like TD Easy TradeTM that can make buying and selling stocks in Canadian and U.S. dollars easy and hassle-free.
What should I know before investing in the stock market?
Once your account is set up, you may be tempted to follow a hunch and just execute a trade. But it's crucial not to get swayed by media frenzy and hype. The stock market can be volatile, and it makes sense to analyze every potential investment while keeping in mind your time horizon (the amount of time you’ll be keeping your money invested in stocks before withdrawing it), investment goals, and investor profile.
Research: As a self-directed investor, it will serve you well to develop an analytical mindset. Once you've identified a company you’d like to invest in, it’s a good idea to analyze the financial statements and other available information about it. After that, assess several stocks in the same industry. This approach, known as comparative analysis, sets the stage for well-informed investment decisions.
Invest and build your portfolio: An important aspect of building a portfolio is diversification. Consider investing in stocks of various companies across different sectors like information technology, energy, or healthcare to create a balanced portfolio. This can help reduce exposure to the risks associated with a single company or sector.
Track your progress: As you build your investment portfolio, it's important to monitor your progress. This will help you track whether you’re staying on course towards your goals. It’s also helpful to review the fees you’re paying and whether any changes need to be made to your asset mix.
Frequently asked questions about investing in stocks
What are the advantages of owning stocks?
There are significant advantages to owning stocks. Stocks may offer long-term growth potential that could outpace inflation as they often grow faster.than the cost of living rises over time. Historically, stocks have offered higher returns than cash or fixed income investments over the long term, but they are generally more volatile and can lose value.Some companies also pay shareholders dividends, and these payments can provide you with regular cash payments.
What is a dividend?
A dividend is a portion of a company’s earnings paid out to its shareholders, typically on a quarterly, semi-annual, or annual basis. Dividends are how companies reward shareholders for their investment. These are usually paid in cash or through dividend reinvestment plans (DRIPs) which buy more shares automatically.
Note that companies are not required to pay dividends, and may cut or suspend them if profits drop or they need to reinvest their cash.
Can I hold stocks in a registered account?
You can hold certain qualified investments, including eligible stocks listed on designated stock exchangesin registered accounts such as TFSAs (Tax-Free Savings Account), RRSPs (Registered Retirement Savings Plan), and FHSAs (First Home Savings Account). These accounts allow you to buy and sell qualified Canadian and U.S. stocks, and they may provide tax-exempt or tax-deferred growth.
How much money do I need to start investing?
You can start investing with a small amount, with some brokers with as little as $1.. Many online brokers don’t require a minimum account balance, making it easier to get started even if you’re only investing a small amount. Some also offer fractional shares, which let you invest by the dollar amount instead of buying a whole share that may cost hundreds of dollars. Apps like TD Easy TradeTM let you open an account with no minimum balance or annual maintenance fee, while also offering cost-efficient trading.
Do I need a broker or “pro” to buy the stocks?
You need a brokerage account to buy stocks, but you do not need a broker or human professional. Online brokerages allow you to invest on your own without an advisor, saving on fees and giving you complete control over your portfolio. But remember that without a broker, it’s up to you to do your own research and you’re responsible for your own investment decisions and outcomes.Without a professional, you may miss risks and it can be harder to build a sufficiently diversified portfolio.
Ready to start investing in the stock market?
You've got choices. Learn about TD Direct Investing intuitive trading platforms and advanced tools or TD Easy Trade™, a simplified easy-to-use app.
The information contained herein has been provided by TD Direct Investing and is for information purposes only. The information has been drawn from sources believed to be reliable. The information does not provide financial, legal, tax or investment advice. Particular investment, tax, or trading strategies should be evaluated relative to each individual's objectives and risk tolerance.
TD Easy TradeTM is a service of TD Direct Investing, a division of TD Waterhouse Canada Inc., a subsidiary of The Toronto-Dominion Bank.
® The TD logo and other trademarks are the property of The Toronto-Dominion Bank and its subsidiaries.
Share this article
Related Articles
View our learning centre to see how we're ready to help
