How to Invest in Stocks in 2026: Go Beyond Index Funds and Buy These 3 Names

If you're not in the market yet, it can feel as if you've missed your chance. Most of the best opportunities seem as if they're in the rearview mirror.

As someone who's been in the market by profession since the late 1990s, however, I can tell you that's just not the case. There are always quality stocks worth stepping into, particularly if you're disciplined enough to buy them and then just leave them alone for years at a time. This is true even if you're a complete newcomer.

To this end, here's what I would tell a newcomer who wants to get started in the stock market but doesn't know where to begin.

How to invest in stocks

The first step is to open a brokerage account with an established, reputable brokerage like Charles Schwab or Robinhood. You can do so online, and if you're a brand-new customer, you'll likely need to verify your identity. Their process will walk you through whatever you need to do to open an account

Most major banks also offer brokerage services, although these accounts will be separate from a checking or savings account. Just be sure to compare commissions and other costs first.

In many regards, a brokerage account or an individual retirement account (IRA) looks and functions like an ordinary bank account. You'll need to deposit money into it, and you can withdraw money from it (although doing so from an IRA can result in tax consequences). Again, the company you choose will walk you through the process.

Where a brokerage account or retirement account differs from a bank account is that any stocks or funds that you buy with this deposited cash sits side by side with your cash in the very same account. Your broker will even pay for its investment fees with the appropriate portion of your cash balance and add to your balance if you sell a stock.

Image source: Getty Images.

As for buying and selling, if you can navigate a website well enough to open an account, you should be able to navigate that online broker's stock-trading interface. You select a stock usually by searching for its ticker (look for a stock-search option somewhere on the screen), and in almost all cases you'll see an option or button labeled something as simple as "buy."

Click that, and the website or app will ask you questions about how many shares you want to buy, and/or how much money you want to invest in the stock. You'll almost certainly get a confirmation screen before placing the trade, just to make sure you typed in the right numbers and the correct ticker.

And if you don't have enough money in the account to pay for the trade, most trading apps will warn you.

That's it: surprisingly simple, really. The chief challenge is just determining which stocks you want to buy in the first place. Look for companies with competitive advantages that are obviously built to last. You'll usually know them when you see them, but here are some suggestions on that front, too.

Best stocks for new investors in 2026

If you've been watching from the market's sidelines long enough, then you've probably heard of index funds. These are baskets of stocks that expose you to most of the market's growth potential without forcing you to take on the risk of picking an individual stock. And when you're talking about your serious money, exchange-traded funds (ETFs) like the SPDR S&P 500 ETF Trust (NYSEMKT: SPY) or the Vanguard S&P 500 ETF (NYSEMKT: VOO) -- which are meant to mirror the performance of the S&P 500 index -- are a smart, low-fuss choice.

If you're just starting out, though, and would like to learn by putting relatively small amounts of your money into the market, I would suggest starting with three individual companies that I'm sure you're familiar with, and would be comfortable holding on to indefinitely even if they underperform for a while.

1. Meta Platforms

It's technically called Meta Platforms (NASDAQ: META), but you'll know it better as the parent to social networking website Facebook (and others, including Instagram and WhatsApp).

Not every quarter is as good as another for Meta. The landscape of consumer-facing technology is constantly changing, and consumers are fickle. With its flagship profit center Facebook primarily being an advertising platform, you never know exactly what you're going to get.

What we do know is that Facebook is the social media platform where nearly 3.6 billion people have chosen to digitally congregate. The company just needs to continually find the optimal way to keep monetizing them.

2. Alphabet

Speaking of things that are here to stay, Alphabet's (NASDAQ: GOOG) (NASDAQ: GOOGL) Google continues to handle over 90% of the world's web searches, according to numbers from Statcounter. It's viewed by many as the portal to the entire internet.

Selling search advertising isn't all that Alphabet does; that only accounts for about two-thirds of its total business. Other arms like YouTube and cloud computing -- where its artificial intelligence revenue is reported -- help make up the other third. And all of it is perpetually and increasingly marketable, with no end in sight.

3. American Express

Lastly, I think first-time investors can safely add credit card provider American Express (NYSE: AXP) to their list of all-around stocks to buy and hold. Bigger names like Visa (NYSE: V) and Mastercard (NYSE: MA) would be fine as well. I'm just partial to the fact that American Express is the card issuer as well as the payment network's owner and operator, meaning it controls every aspect of the card-based purchase process rather than counting on another player or partner to do its part of the job well.

It's not a high-growth holding -- although this year's expected top-line growth is above its long-term average. American Express is a consistent grower, though, offering stability to a portfolio that might also include Meta and Alphabet.

Just remember that index funds like the two aforementioned ETFs are arguably the smarter bigger bets for more serious amounts of money. Smaller positions in these individual stocks are more for learning purposes, or add-ons to a foundation first laid by index funds.

American Express is an advertising partner of Motley Fool Money. Charles Schwab is an advertising partner of Motley Fool Money. James Brumley has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, American Express, Mastercard, Meta Platforms, Vanguard S&P 500 ETF, and Visa. The Motley Fool recommends Charles Schwab and recommends the following options: short September 2026 $95 calls on Charles Schwab. The Motley Fool has a disclosure policy.