ANSWERS: 1
  • Some individuals would like to invest in stocks, but they don't know how or where to begin. Getting started may be intimidating. Stock investing is open to everyone. Investing in stocks is a big part of the American economy.

    Significance

    In order to buy, sell, trade or invest in stocks an individual must open an account and complete a new account form. General information such as name, address, and phone number are required, as well as other financial information and trading goals.

    Considerations

    A child or a teen may be interested in learning how to invest. Individuals under the age of 18 can buy stocks if a custodial account is opened and monitored.

    Identification

    Individuals will be asked to fill out and sign a W-9 form that is a request for a taxpayer's identification number and certification. This is a legal document issued by the Internal Revenue Service (IRS) for tax purposes.

    Geography

    Stocks can be bought and traded not only on the U.S. stock exchanges, but also on many foreign exchanges. Stocks cannot be purchased from countries that the United States has an embargo against, such as Cuba and Iran, as of 2009.

    Foreigners

    Foreigners can trade U.S. stocks and do not pay taxes on stock purchases. However, they cannot deduct losses and dividends are taxed at 30 percent. Foreigners fill out a W-8 IRS form that permits a foreigner an exemption from certain U.S. information return reporting and backup withholding regulations.

    Potential

    Investing in stocks can return many rewards and profits. Risks are also part of investing in stocks.

    Source:

    MSN Money Central: Investing 101

    Associated Content: How to Open A Stock Account

    W9formhelp.com: The Purpose of W9 Form

    More Information:

    Foreigners Buying US Stock

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