How to start buying stocks for the first time? The attraction may be obvious, but the process may seem off-putting.

In fact, I think it might be a plain thing.

Starting relatively modestly, rather than waiting until you have thousands of pounds saved, could mean not only that you start buying shares sooner, but also that beginner mistakes will be less costly.

1. Setting up a trading account

My first move would be to deposit money into an account that would allow me to buy and sell shares. This could be, for example, a shares trading account or a Stocks and Shares ISA.

With less than £500 to invest, but still diversifying across stocks to assist manage risk, commissions and fees can soon add up. Therefore, I would pay close attention to what suits my budget and investment goals.

2. Determining the investment goal

Some investors want to buy growth stocks. Others look for passive sources of income through dividends. Some would like both.

I think being clear about your goals can assist you make decisions along the way.

3. Learning about the stock market

I do not own shares in Robotic Maker Intuitive surgery (NASDAQ: ISRG).

Why? Ultimately, I think it’s a great business. The surgical market is huge and will likely remain so indefinitely. By automating parts of the process, Intuitive’s robotics offering has the potential to bring consistency and cost savings to hospitals.

Selling and servicing machines and disposable attachments used in every office is a profitable business. Rivals may look at the company’s success and launch similar products, reducing profitability. In fact, I consider this a key risk.

However, Intuitive has gigantic advantages, from its proprietary technology to its extensive library of prior procedural workflows.

So why don’t I own the stock? In brief, I think they are just too steep. Becoming familiar with concepts such as valuation is significant from the moment you start investing, if not before.

4. Building a portfolio

Then I would make a shopping list of what I thought were great companies. Where these shares were available at what I thought was an attractive valuation, I would start buying them with my £500.

This £500 would be enough for me to diversify, for example by buying two or three different shares. I could also consider purchasing shares in mutual funds, which themselves tend to be diversified into different investments.

I would start buying stocks as I intended: focusing on high-quality companies and with the intention of holding them for the long term.

5. Sustaining and pursuing long-term growth

Over time, my experience grew. I hope this will be the case with my portfolio valuation and passive income streams, although this is not guaranteed.

I wish I didn’t trade regularly. However, I would like to invest more money over time, either fresh funds or simply earned dividends.