can a regular person buy stocks

Can a regular person buy stocks? Yes. This comprehensive guide explains who qualifies as a retail investor, step-by-step how to open and fund an account, order types, costs, taxes, risks, and pract...

2025-12-26 16:00:00

By Meta Cipher

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Can a regular person buy stocks — guide

Quick answer: can a regular person buy stocks? Yes — virtually any private individual can buy stocks through regulated brokerages, retirement plans, or fractional-share services. This guide explains requirements, step-by-step procedures, costs, taxes, risks, and how to get started safely (including Bitget options).

What is a stock?

A stock is a unit of ownership in a publicly traded company. When you buy a share, you acquire a claim on a portion of the company's assets and earnings. Stocks can provide two primary economic benefits:

Capital appreciation — the share price may rise over time.
Dividends — companies may distribute a portion of profits to shareholders.

Stocks of U.S. companies commonly trade on public exchanges such as the New York Stock Exchange (NYSE) and Nasdaq. Trades execute through broker-dealers that connect investors to those markets.

Who qualifies as a retail (regular) investor?

A retail investor — often called a "regular" or "individual" investor — is a private person investing personal funds rather than a professional money manager or institutional entity. In most jurisdictions, the basic qualifications to open and use a brokerage account are straightforward:

Legal age to enter contracts (commonly 18 years in many countries). Exceptions exist and are discussed below.
Proof of identity and residency for KYC (know-your-customer) checks.
A tax identifier (e.g., Social Security Number or TIN for U.S. residents) in many broker onboarding flows.

Regulatory status matters less for day‑to‑day retail investing, but certain sophisticated products (complex derivatives, margin, short selling) require additional approvals and eligibility checks.

Age and custodial accounts

Minors cannot usually open standard brokerage accounts themselves. However, there are established routes for minors to own stocks:

Custodial accounts (UGMA/UTMA in the United States): An adult custodian opens and manages the account until the minor reaches the age of majority defined by state law. The custodian controls trading on behalf of the minor.
Trust accounts: Families may use trusts to hold investments for minors or beneficiaries under trustee control.

These accounts let caregivers or parents buy stocks for children while meeting legal requirements.

Residency and non-U.S. investors

can a regular person buy stocks if they live outside the U.S.? Often yes. Many brokerages provide international access to U.S. equities for non‑U.S. residents, but onboarding typically requires extra documentation (passport, proof of address, tax residency forms) and may include tax withholding on U.S.-source dividends. Local laws in some countries may restrict access or require onshore intermediaries.

Broker selection should consider international access and local tax reporting. When using a platform, prefer regulated providers with clear documentation. For custody and wallet services related to tokenized stocks or other digital assets, Bitget Wallet is a recommended option within the Bitget ecosystem for secure asset custody.

How to buy stocks — practical steps

Below is a high-level, step-by-step roadmap for a regular person who wants to buy stocks.

Decide your objective and time horizon.
Choose a brokerage or platform.
Open and verify your account (KYC).
Fund the account.
Research securities and build a plan.
Place an order (market, limit, stop).
Monitor positions and rebalance as needed.

This sequence is simple in concept; execution details vary by provider and country.

Choosing a brokerage

Types of brokerages:

Full-service brokerages: Offer advisory services, portfolio management, and personalized planning for higher fees.
Discount/online brokerages: Low-cost execution and research tools for self-directed investors.
Brokerage mobile apps: User-friendly interfaces for trading on the go; many support fractional shares and instant deposits.
Robo-advisors: Automated portfolio management based on your risk profile.

Selection criteria for regular investors:

Fees: commission, account, inactivity, and transfer fees.
Platform usability: web, mobile, research tools.
Available products: individual stocks, ETFs, mutual funds, fractional shares.
Account types supported: taxable accounts, IRAs/retirement plans, custodial accounts.
International access and currency conversion.
Regulatory protections and custody arrangement.

Bitget offers a regulated, user-friendly trading platform geared toward retail investors and supports a range of asset types. If you’re exploring digital-asset-adjacent or tokenized securities, Bitget services and Bitget Wallet can be considered for custody and trading.

Account types

Common account types you’ll encounter:

Taxable brokerage accounts: Flexible, no contribution limits, taxable events occur on gains and dividends.
Retirement accounts (IRA, Roth IRA, 401(k) in the U.S.): Tax-advantaged but come with contribution limits and withdrawal rules.
Custodial accounts (UGMA/UTMA): For minors under adult supervision.

Tax treatment differs across account types. Retirement accounts defer or exclude taxes depending on structure; taxable accounts incur taxes on realized gains and dividends.

Verification and funding

Standard onboarding requires identity verification (photo ID, proof of address) and often a tax identifier. Funding methods commonly include bank transfers (ACH/wire), debit/credit, or in some platforms instant deposit features. Many modern brokerages have no minimum deposit; fractional-share features lower the barrier further.

can a regular person buy stocks with a very small amount? Yes — fractional shares let investors buy portions of expensive stocks with modest capital.

Order types and settlement

Basic order types:

Market order: buy or sell immediately at the best available price.
Limit order: execute only at a specified price or better.
Stop (stop-loss) order: becomes a market order once a trigger price is reached.

Execution happens through market makers or exchanges, and brokerages have obligations toward "best execution". Settlement is the process of exchanging stock for payment; for most U.S. equities, settlement is on a T+2 basis (trade date plus two business days). Settlement timing affects available buying power and withdrawal of funds.

Ways to invest in equities

Retail investors can gain equity exposure through multiple routes:

Individual shares: direct ownership of company stock.
Fractional shares: buy a portion of a share when full shares are expensive.
Exchange-traded funds (ETFs): diversified baskets traded like stocks.
Index mutual funds: professionally managed funds that track an index.
Dividend reinvestment plans (DRIPs): automatically reinvest dividends into additional shares.
Derivatives (options, futures): offer leverage or hedging but require approval and carry higher risk.

Each approach has trade-offs in diversification, cost, and complexity.

Costs, fees and execution quality

Costs to consider:

Commissions: Many U.S. brokers now offer $0 commissions on stock and ETF trades, but fees still exist in other markets.
Spreads: The difference between the bid and ask price can be a hidden cost for partial fills or illiquid stocks.
Margin interest: Borrowing to trade carries interest costs and amplified losses.
Account fees: inactivity, maintenance, or transfer fees.

Execution quality matters — concepts such as price improvement, route-to-market, and execution speed can affect the received price. Regulated brokerages must disclose execution practices and conflicts of interest.

Risks and considerations for regular investors

Common risks:

Market risk: overall price declines.
Volatility: rapid price swings.
Company-specific risk: poor earnings, management, or business disruption.
Liquidity risk: inability to sell quickly at a fair price.
Concentration risk: overexposure to one stock or sector.

Mitigation strategies include diversification, appropriate position sizing, longer time horizons, and using low-cost diversified funds for broader exposure.

Taxes and reporting

Taxation differs by jurisdiction. In the U.S.:

Capital gains are taxed when you sell: short-term (held ≤1 year) taxed at ordinary income rates; long-term (>1 year) taxed at preferential rates.
Dividends can be qualified (lower tax rate) or non-qualified.
Brokerages issue tax forms (e.g., Form 1099-B) reporting proceeds and cost basis for tax filing.

Non-U.S. residents may face U.S. withholding on dividends and must follow local tax rules for capital gains and income. Always consult a qualified tax advisor for personal tax guidance.

Regulatory protections and investor safeguards

In the U.S., retail investors benefit from several protections:

Broker-dealer regulation by agencies such as the SEC and self-regulatory bodies like FINRA.
Custody protections and disclosure requirements.
SIPC (Securities Investor Protection Corporation) coverage for failed brokerage firms — typically limited in scope and amount and not insurance against market losses.

SIPC protects customers if a broker fails financially by covering missing assets up to specified limits; it does not protect against declines in value. FDIC insurance does not apply to securities — it covers bank deposits.

If you encounter problems with a broker or suspect fraud, regulators provide complaint channels and enforcement mechanisms.

Alternatives and complementary routes to equity ownership

Employer-sponsored retirement plans (401(k), pensions): tax-advantaged access to equities and often employer matching.
DRIPs and direct purchase plans: buy directly from a company in some cases.
Robo-advisors: automated, diversified portfolios with rebalancing.
ETFs and mutual funds: convenient ways to diversify broadly with lower single-stock risk.

For investors exploring digital custody and tokenized assets, Bitget’s platform and Bitget Wallet offer secure custody solutions and access to a range of asset classes.

How to prepare before buying

Checklist for regular investors before placing the first trade:

Define financial goals and time horizon.
Assess risk tolerance and liquidity needs.
Build an emergency fund (3–6 months of expenses recommended by many planners).
Learn basic investment concepts (diversification, compounding, fees).
Start with a plan — allocation, entry rules, and rebalancing.
Consider dollar-cost averaging to reduce timing risk.
Keep position sizes manageable; avoid overconcentration.

Common misconceptions and FAQs

Do you need a lot of money to start? No. can a regular person buy stocks with small amounts? Yes — fractional shares and low-minimum accounts make it possible.
Are markets only for professionals? No. Retail investors participate in the same markets as professionals, though tools and knowledge differ.
Can you lose all your money? In single-company stock investments, yes — with diversified funds the risk of total loss is much lower but not zero.

Special topics

Margin trading and short selling — brief risks and requirements

Margin amplifies gains and losses and requires approval and a margin account. Short selling exposes an investor to theoretically unlimited losses. Both activities require understanding of margin calls, maintenance requirements, and added costs.

International investing considerations — currency risk and ADRs

Buying foreign equities can introduce currency risk. American Depositary Receipts (ADRs) allow U.S. investors to buy shares representing foreign stocks in U.S. dollars — useful for regular investors seeking international exposure.

Impact of fees and taxes on returns — illustrative note

Small recurring costs (0.5% fees annually) can materially reduce long-term returns through compounding. Likewise, frequent taxable trading may increase the tax drag on returns.

Practical example: a step-by-step starter plan for a regular investor

Set goal: retirement in 20 years, target $500,000.
Emergency fund: build 3–6 months’ expenses in cash savings.
Open a taxable brokerage account and an IRA (if eligible) at a regulated provider.
Fund accounts incrementally, use dollar-cost averaging.
Start with diversified ETFs (broad-market) and a small allocation to individual stocks you understand.
Rebalance annually and tax-loss harvest if appropriate.

This is an educational example, not personalized investment advice.

Frequently asked: can a regular person buy stocks — quick answers

Q: Do I need to be accredited to buy stocks?
- A: No. Most stocks and ETFs are available to retail investors. Accredited-only investments (private placements) are a separate category.
Q: Can I trade during after-hours?
- A: Many brokerages offer extended-hours trading with different liquidity and price risks.
Q: Are fractional shares safe?
- A: Fractional shares represent proportional ownership through the brokerage and are generally safe with a regulated custodian, but note custody terms.

Regulatory and news context (timeliness note)

截至 2025-11-15，据 MarketWatch 报道，退休储蓄被描述为“团队运动”，夫妻双方的收入和缴纳计划会影响可供退休使用的资金池与税务安排。该报道强调：若家庭中一方有工资收入，另一方仍可按规定向罗斯 IRA 等账户缴款（前提是满足收入限额和其他资格条件）。该新闻在个人退休储蓄与长期投资规划方面提供了实用背景，对考虑退休账户与应如何在常规券商开户并长期持有股票的普通投资者具有参考价值。

How to get started with Bitget (actionable guidance)

If you’ve decided that can a regular person buy stocks and you want a regulated, user-friendly path to enter markets, consider these next steps:

Explore Bitget’s educational pages to compare account types and supported products.
Open and verify an account with Bitget and set up Bitget Wallet for custody if you plan to hold tokenized assets.
Start small, use fractional-share access where available, and keep a record for tax reporting.

For more on Bitget features and onboarding, visit Bitget’s official resources — they provide step-by-step walkthroughs for new retail investors.

Note: This article is educational and informational only. It is not financial, tax, or investment advice. Rules, availability, tax treatment, and brokerage services vary by country and over time; consult a qualified professional for advice tailored to your situation.

The content above has been sourced from the internet and generated using AI. For high-quality content, please visit Bitget Academy.