To buy your initial stock, it used to be you will need to find a stockbroker, sometimes called an account executive or a financial planner. They are licensed by the exchanges on which they place orders. They are bound by ethical guideline of the exchanges and the Securities Exchange Commission. Some companies do offer buying and opening an account directly, so check into it often called a DSP, Direct Stock Purchase.

Stockbrokers work for brokerage firms or "houses" that own seats on the different Exchanges. Basically, you give your broker an order, which the broker transmits to a member of the securities exchange, which makes the trade. Confirmation of the trade is then sent back to the broker placing the order and then relayed to you. This process is carried out in a matter of minutes if the price is right.

They also send you a statement at the end of the month describing all your transactions for the month showing commission charges, interest charges, dividends and interest received, and your account balance. You should keep track of this anyway on your own. Do keep these statements in a safe place for tax purposes.

Full service brokers, who charge more and sometimes substantially more, for trades than discount brokers. They justify their premium price by the range of services they offer. Mainly including research and summary reports that can be found in the library or on the internet if you know where to look. They also have a sophisticated research staff that periodically issues analyses of general economic, industry, and company behavior and recommends specific stocks to buy and sell. You can expect a full service broker to make these recommendations depending upon your short and long term investment goals that you all have discussed. Remember, recommending is just an educated guess and does not guarantee any success. Do your own homework also.

Discount brokers offer a discounted rate because they offer neither research information nor advice. They are simply order takers and save you 30 to 70 percent off the commissions of a full service broker. This in turn will effect your profit in the long run, so you must weigh the added commissions against the value of the advice you receive.

Many investors use a combination of full service and discount brokers depending upon your needs. If you know exactly what you want to buy or sell, use a discount broker to save on the commission fees. If you think you need advice, turn to your full service broker.

When selecting a full service broker, call around and find a few to interview. Take the time to set up an appointment and meet with them. Have them tell you about their basic feelings about their own ideals. Take a look at their knowledge on the economy, market indicators and how much volume do they do. Are they conservative or do they speculate on the pot of gold at the end of the rainbow. Keep a strictly business relationship. Then tell them your viewpoints and goals. Don’t forget to discuss commission costs and get a commission schedule. Are there transaction fees and any other fees? Remember that it is your money.

A responsible broker will do everything to get to know your personal financial needs and establish a long-term relationship. Be cautious of a broker that is constantly moving around your account and is changing it. They are recommending buy and sell ideas simply to generate commissions in their own pockets. This is how they make money. Your goal is to choose a broker that understands your goals and provides the services at the lowest possible cost. Be careful about a broker that wants to get too personal and be your friend. They are too eager to gain your trust, watch out.

Your profit is the buying price minus commissions, subtracted from the selling price minus commissions. Also Uncle Sam wants his share in taxes. Be sure to ask your broker what tax rate you will be in depending upon your income and also the time factor involved in how long you hold the security. This is also why your commission cost is so important. It is money in your pocket.

Be sure to read any of the paperwork in setting up the account and ask questions if you do not understand any detail. It is a good idea for Long Term investments with a full service broker to insist that the stocks are put in your own name and sent or given to you directly. No Street names of the brokerage house. Be sure to check if there is a cost involved in getting your certificate.  Keep them in a safe place or consider a safe deposit box at your local bank. Besides, if you enroll in a Dividend Reinvestment Policy (DRIP), the company has an option for you to send them in so they will deposit your certificates for safe keeping.  You can always redeposit the certificates in the account if you wish to sell the stock.  

You can establish a number or different types of accounts with both the full service stock broker or a discount online broker. Single or joint accounts. Joint accounts are the most common for a husband and wife or a child. The account for a minor is a custodial account; a parent or guardian must be part or all transactions. Sometimes a married couple will have two or more accounts. Each spouse will have a single account and together they will have a joint account. It is a good idea to put the long-term stocks in the joint account and the short term (quick cash) in you own single account, fewer signatures.

Online Discount Brokerage houses which is the way to go much like TDAmeritrade, Schwab and Fidelity are very easy to set up.  Usually there is a minimum amount to deposit into a new account.  The advantage to these are you make your own decisions and trades for a much lower commission rate or not at all.  Make sure you check if there is a minimum  amount of trades per month or a monthly fee with some of them.  To make a trade, it is fairly simple.  Most all of them will have some type of assistance to help you place your first trades until you get the hang of it.