Welcome to professorsavings.com, we teach finance basics. Today we will teach you about opening your first brokerage account.
Hi I’m Rayfil Wong. We hope these investment concepts will help you be a better investor.
When you decide to invest and open your first brokerage account, you need to make several important choices. First, decide on whether you want a full-service broker or a discount broker.
A full-service broker is more expensive but provides personalized research, advice and portfolio management, however a discount brokerage will save you money so long as you have the willingness to do some work and research yourself.
Your next step is to choose a brokerage firm. Do your research and look for a company with a good reputation that’s within your price range. Don’t assume that the most or at least expensive option is the best or worst.
Make sure to choose a brokerage that offers the type of account you require.
Third, examine whether the brokerage will facilitate your investment goals by answering a few of the following questions. Does the brokerage offer the investment selection you want?
How easily can you move money into and out of your account? Can you establish an automatic investment plan?
Next, scrutinize the fee schedule as fees will have a major impact on your long-term returns. Lastly, remember not to invest money that you may need in the short term. Try to keep at least three months worth of cash in an emergency fund prior to investing.