How do I Buy NASDAQ Stock?

by Michael Roennevig Google

    If you want a piece of some of the country's hottest tech firms, you're going need to get up to speed with how to invest in NASDAQ stock. NASDAQ indexes were home to around 3,400 listed companies with a combined market capitalization of $6 trillion as of October 2012. Once a NASDAQ company has caught your eye and you've decided its stock is heading in the right direction, there are a number of ways to take advantage.

    Step 1

    Contact the investor relations department of the NASDAQ-listed company you want to invest in and find out if it issues stock to individual investors directly. Shares traded on the NASDAQ exchange can typically only be bought and sold by brokers, but some firms offer Direct Purchase Plans that let members of the public buy shares themselves. If the firm you want to invest runs a DPP, you won't have to pay broker fees. You also won't have to hold your stock certificates because your purchase will be recorded directly on the books of the company. You can get a list of firms that offer DPPs from DRIPInvestor.com.

    Step 2

    Research broker fees and minimum deposit requirements if you can't buy the NASDAQ stock you want to invest in directly. If you only want to invest a relatively modest sum, you'll be better off using an online discount brokerage. Full-service brokers have higher minimum deposits and charge steeper fees. You can find a list of NASDAQ's online broker partners on its website.

    Step 3

    Sign up for a brokerage account, deposit some funds and issue an instruction to purchase the stock you're interested in.

    Step 4

    Invest in mutual funds to spread your risk across the NASDAQ index. These can be bought directly from the mutual fund companies themselves or through brokers. Funds are designed to produce returns in line with the performance of the index as a whole. The advantage is that if one NASDAQ company runs into trouble, other companies in the fund can help pick up the slack.

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    About the Author

    Michael Roennevig has been a journalist since 2003. He has written on politics, the arts, travel and society for publications such as "The Big Issue" and "Which?" Roennevig holds a Bachelor of Arts in journalism from the Surrey Institute and a postgraduate diploma from the National Council for the Training of Journalists at City College, Brighton.

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