How to Make Money in Stocks in 2026: 6 Easy Steps

The secret to making money in stocks? Staying invested long-term, through good times and bad. Here's how to do it.

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The investing information provided on this page is for educational purposes only. NerdWallet, Inc. does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments.

1. Open an investment account 2. Consider stock funds instead of individual stocks 3. Stay invested with the "buy and hold" strategy 4. Check out dividend-paying stocks 5. Explore new industries 6. Dollar-cost average How to Start Investing in Stocks Individual Retirement Account (IRA): What It Is & How It Works The Best Index Funds and How to Start Investing Making money in stocks is usually a long-term game: Very few people clean up overnight. People who make money by investing do so by consistently putting money away over a long period of time. While consistency and time are important in investing, some strategy can help too. Tactics like "buying and holding" and reinvesting dividends can likely increase your returns. Here's how to sustainably grow your wealth with stocks.

1. Open an investment account

First thing's first: You need to have an investment account to buy stocks. Opening an investment account is similar to opening a bank account. You can add money to your account through a bank transfer, then you can use that money to buy stocks. An investment account is not an investment itself: It's where your investments live. Brokerage firms

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on Charles Schwab's website

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on E*TRADE's website

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on Vanguard's website

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on Fidelity's website

There are several types of investment accounts. Choosing the right account for you may save a lot of money on taxes. It may even benefit you to have a few different investment accounts. For example, financial advisors often say to start investing through a 401(k) (a workplace investment account) if it's available to you. That's especially true if the employer offers a match. Then, they say to start investing in either a Roth or traditional IRA for tax benefits. Then you can move to a traditional brokerage account if you have money left over.

2. Consider stock funds instead of individual stocks

If you want to make money in stocks, there is a much easier, and often more lucrative, way to do it: index funds. These investments are made up of dozens or even hundreds of stocks that mirror a market index, such as the S&P 500. With index funds, or exchange-traded funds, you don't need to know much about the individual companies to succeed. Instead, you're investing in lots of stocks all at once, and you don't have to manage them individually. Investing through funds can help decrease your risk. For example, if you are invested in three companies and one goes out of business, your overall portfolio will likely drop. If you're invested in 500 companies and one goes out of business, it probably won't affect you as much. Make sense of the markets with The Nerdy Investor A weekly wrap on what's moving markets, plus two monthly deep-dives on how to improve your investing, straight to your inbox. Subscribe for free Sure, it's possible to earn more money with individual stocks than index funds, but you’ll need to do a lot of work first. You'll have to do a lot of research on individual companies. And even with all that work, you're still less likely to make more money than just by investing in funds. » Learn more: Stocks vs. funds » Learn more:

3. Stay invested with the "buy and hold" strategy

The key to making money in stocks (if you're investing in funds remember that you're still investing in stocks) is staying invested. Your length of time in the market is the best predictor of your total performance. The "buy and hold strategy" is exactly what it sounds like. You buy stock investments that you think will perform well over time, then hold onto them for years to come. The stock market’s average return is a cool 10% annually before inflation. But many investors fail to earn that 10% simply because they don't stay invested long enough. They often move in and out of the stock market at the worst possible times, missing out on annual returns. The more time you're invested in the market, the more opportunity there is for your investments to go up. The best-performing stocks increase their profits over time and investors continue to buy the stock. That in turn increases the stock price. That higher price translates into a return for investors who own the stock.

4. Check out dividend-paying stocks

More time in the market also allows you to collect dividends, if the company pays them. Dividends are regular distributions of profits that some companies pay out to shareholders. If you’re trading stocks often, you won’t own the stock long enough to capture the dividend payouts. There are also dividend ETFs you might consider for more diversification. And when you reinvest those dividends? You can boost your total return. That means electing to put dividend payouts back into buying more shares of the stock or ETF. You can likely automate this process through your brokerage account — we have a list of the best brokers for dividend stocks that do this well.

5. Explore new industries

If you're interested in investing in stocks for the rush, index funds or ETFs may not do it for you. So it's fine to set aside a small portion of your portfolio to check out individual companies or industries that feel more exciting. Some industry stocks, like commodity stocks, are tried and true. Others, like AI stocks, are booming now — but that may change. You'll want to research the industry and any potential investments first. One way to take less risk is to invest in industry ETFs, such as AI ETFs rather than AI stocks.

6. Dollar-cost average

The stock market is the only market where the goods go on sale and everyone gets a little nervous about buying. That may sound silly, but it’s exactly what happens when the market dips. Investors understandably become scared and often sell in a panic. But when prices rise, investors plunge in headlong. It’s a perfect recipe for “buying high and selling low" instead of "buying low and selling high." To avoid that, you can employ a strategy called dollar-cost averaging. With this approach, you invest at regular intervals over time. This makes it so, on average, you're not putting a whole bunch of money into the market when the price is either very high or very low. Nerdy Perspective Dollar-cost averaging sounds fancy, but there's a good chance you're already doing it. If you have a 401(k) or other retirement account through work, and you have selected investments in that account, your employer pulls contributions out of your paycheck on a regular schedule and deposits them into your 401(k) for you. Once they're in there, the 401(k) administrator invests the money in the investments you've selected, allocated in the amounts you have directed. This is dollar-cost averaging — investing on a regular basis whether the market is up or down. If you don't have an employer-sponsored retirement account, a similar system is possible in an IRA or other brokerage account.

Arielle O'Shea

NerdWallet Editor

Explore more on About the author O'Shea Arielle O’Shea leads the investing, advisory and taxes content teams at NerdWallet. She has covered personal finance and investing for 20 years, and was a senior writer and spokesperson at NerdWallet before becoming an editor. Previously, she was a researcher and reporter for leading personal finance journalist and author Jean Chatzky, a role that included developing financial education programs, interviewing subject matter experts and helping to produce television and radio segments. Arielle has appeared on the "Today" show, NBC News and ABC's "World News Tonight," and has been quoted in national publications including The New York Times, MarketWatch and Bloomberg News. She is based in Charlottesville, Virginia. Published in Best Brokerage Accounts for Online Investing and Stock Trading in 2026 By Chris Davis Best Robo-Advisors for Automated Investing: Top Picks for 2026 By Alana Benson, Sabrina Parys Investing in Dividend Stocks: Guide, Calculator and Top 7 Yields for July 2026 By Chris Davis, Sam Taube Best Brokers for Beginner Investors: Top Picks for 2026 By Alana Benson, Bella Avila Best Investments: Where to Invest in 2026 By Chris Davis, Alieza Durana