https://images.unsplash.com/photo-1604594849809-dfedbc827105One of the most pressing issues the global health crisis has brought to the fore is the need to have multiple sources of income. As the past few months have shown, even the most stable jobs can be easily taken away during unrelenting situations such as a pandemic. So, it only makes sense for individuals to consider making investments. And the first component in finding success in investments is a brokerage account.
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What is a brokerage account?
Just like a checking account, a brokerage account is there to hold the money you are planning to use to buy assets such as stocks, bonds, ETF and gold. In a sense, a brokerage account can be thought of as a separate financial account that holds securities on behalf of the investor.
In most cases, the process you have to go through to set up a brokerage account is pretty straightforward. You just have to find a brokerage firm, put down a deposit, and then you are good to go. However, not all brokerage accounts are the same. For instance, you can choose between a financial planner that can manage your portfolio and provide advice in exchange for a fee, or opt for a more independent setup where you manage your own stocks. These come with lower costs and account minimums, and can be a good option for investors who like to be hands-on.
How to maximize your online brokerage account
Now that you have a brokerage account, the next thing you have to focus on is learning how to maximize it. With that in mind, here are some of the tips that can help you out:
Understand commissions, fees, and costs
To make full use of your online brokerage account, the first thing you have to do is to develop a deep understanding of the fees and commissions that come with your account. These days, many brokerage accounts brandish zero commission trades, which can be a good thing for newbie investors.
However, it is important to note that there are many other costs and fees you have to take into account when making investments. To avoid getting caught off-guard, take the time to find the fee schedules and make sure that you are well aware of the costs different kinds of transactions entail based on your chosen brokerage account.
Make informed investment decisions
Setting aside time for adequate research before making an investment decision is of the utmost importance. This is especially true now that economic volatility is high. Some of the ways you can make better investing decisions in the midst of a pandemic are by maintaining an emergency fund, regularly rebalancing your portfolio, and considering an appropriate mix of investments.
Some investments worth checking out are cryptocurrencies and gold. With the world plagued with uncertainty right now, improving your ability to plan, analyze and prioritize investments can also help maximize your brokerage account significantly.
Think about how you will fund your account regularly
With the ongoing crisis putting many in a financial bind, it is all the more important for budding investors to really think about how to fund their accounts. Brokerage accounts require you to deposit money into them on a regular basis, so this is something you really need to consider when you begin your journey.
If you don’t have a steady source of income that will provide you with disposable income each month, you will not be able to make significant investments nor keep up with the fees these investments can accrue. If this is the case, then you are more likely to build wealth if you buy shares in a mutual fund, ETF, or stocks at scheduled times throughout the year, so it would really be in your best interest to have a steady source of funds for your brokerage account.
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