When I first got interested in the stock market, I felt completely overwhelmed. Everyone was talking about charts, candlesticks, P/E ratios, and earnings reports. I thought I had to become some kind of financial wizard to make a good decision. But here’s the truth: you don’t need a finance degree to learn how to pick stocks as a beginner.
In this article, I’ll walk you through how I picked my first stock without just throwing a dart at a list—and how you can do it too.
Why I Didn’t Want to Guess
Let’s face it—guessing is gambling. And I wasn’t trying to gamble. I wanted to invest—to grow my money, not lose it chasing hype.
I had watched a friend pour a few hundred bucks into a stock because “everyone on Reddit was talking about it.” A few weeks later, the hype died and so did his investment. That was the moment I decided: no guessing, no chasing trends.
Step 1 – Learning the Basics (Without Drowning)
Before even looking at a single stock, I knew I had to understand what I was buying.
What is a stock, really?
A stock is simply a slice of ownership in a company. When you buy a share, you own a piece of that business. So instead of thinking of it as a ticker symbol, I started asking:
- Do I believe in this company?
- Would I want to own a part of this business?
- That shift in mindset helped me filter out a lot of noise.
H3: Resources I Used
I didn’t dive into 500-page textbooks. Instead, I kept it simple:
- YouTube – Graham Stephan and Andrei Jikh had super beginner-friendly videos.
- Books – The Little Book of Common Sense Investing by John Bogle gave me a solid foundation.
- Apps – I used Yahoo Finance and Seeking Alpha to track companies.
Step 2 – Picking an Industry I Actually Understand
I decided my first stock should come from an industry I knew and cared about. For me, that was tech and consumer goods—stuff I used every day. I wasn’t going to invest in oil companies or pharmaceutical giants when I didn’t even understand how they made money.
I made a list of companies I interacted with often:
- Apple (used my iPhone daily)
- Starbucks (guilty of a $5 coffee habit)
- Nike (my go-to shoes)
- Microsoft (used it for work)
Starting here helped me feel connected to the companies I was researching.
Step 3 – Looking at the Business, Not Just the Stock
Here’s where the real turning point happened for me. I started thinking like a business owner, not a trader.
What I Asked About Each Company
Do they make money consistently?
I checked their earnings. Were profits growing year over year?
Do they have a competitive advantage?
For example, Apple has brand loyalty and an ecosystem that keeps people locked in.
Are they in debt?
A bit is fine, but I didn’t want to invest in a company drowning in IOUs.
Are people still going to want this in 10 years?
Starbucks coffee isn’t going out of style any time soon.
I used free resources like Yahoo Finance’s “Statistics” and “Financials” tabs to peek at revenue, net income, and debt.
Step 4 – Comparing a Few Good Options
By this point, I had narrowed my list to:
- Apple (AAPL)
- Starbucks (SBUX)
- Microsoft (MSFT)
All three were strong, but I had to choose just one. So I compared:
Company Dividend? Revenue Growth Brand Strength
Apple Yes High Very Strong
Starbucks Yes Moderate Strong
Microsoft Yes High Very Strong
Why I Picked Microsoft
Steady revenue and profit growth
It wasn’t flashy, but it was solid.
Diversified business model
Cloud computing (Azure), software (Office), and gaming (Xbox) = multiple streams of income.
Strong moat
Hard to imagine a world without Microsoft products.
Plus, they paid a small dividend, which meant I’d earn a little income just for holding the stock.
Step 5 – Starting Small and Hitting Buy
I had about $100 to start. Thanks to fractional shares, I didn’t need to buy a whole share of Microsoft (which was over $200 at the time). I bought about $50 worth—and that was it.
How It Felt to Own My First Stock
Honestly? Empowering.
I checked my portfolio every day at first. (I’ve since stopped doing that.) But seeing even a few cents in growth—or that first tiny dividend—was so motivating. I felt like I’d finally taken the first step toward building wealth.
Tips on How to Pick Stocks as a Beginner
If you’re still wondering how to pick stocks as a beginner, here are my best takeaways:
1. Buy What You Know
If you understand how a company makes money, you’re less likely to panic when things get bumpy.
2. Research the Business, Not the Hype
Forget what’s trending on social media. Dig into revenue, earnings, and what makes the company unique.
3. Start With a Watchlist
Track a few companies before buying. Get familiar with their ups and downs.
4. Use Fractional Shares to Start Small
You don’t need hundreds of dollars. Invest $20 in a company you believe in and learn as you go.
5. Don’t Just Copy Others—Learn Why They Picked It
Everyone has different risk tolerance, goals, and timelines. What works for one person may not work for you.
Final Thoughts: You Don’t Need to Be an Expert to Start
- Picking my first stock wasn’t about making the perfect choice—it was about making a smart one. I didn’t rely on hot tips or guesswork. I asked questions, did a little research, and chose a company I truly believed in.
- If you’re just starting and wondering how to pick stocks as a beginner, trust me—start with curiosity, not fear. You’re not trying to pick the best stock ever. You’re just trying to take your first step into investing wisely.
- So go ahead—build that watchlist, do a little digging, and make your move. Future you will thank you.
Next Article To Read: Should You Buy ETFs or Individual Stocks First?