Brokerage Account: What Is It & Should You Open One Today? Khaled Hawari Ottawa
Khaled Hawari is a financial expert based in Ottawa, Canada. With several years of experience in DeFi and traditional blue chip investments, Kal Hawari (Ottawa) provides helpful information regarding finance, accounting, and fintech. The following article on brokerage accounts is based on personal opinion and research.
You'll learn the following things as you read on:
● Should you open a brokerage account to start investing in blue-chip stocks?
● What exactly are brokerage cash accounts & how do they compare to brokerage margin accounts?
● Effective tips for getting brokerage accounts today
● Brokerage accounts aren't just for rich people in 2023
How to start investing in blue chip stocks?: Khaled Hawari (Ottawa) opinion
In case you don't know, blue chip stocks are stocks that come from a reputable firm. These stocks are known to possess a strong history of performance as well as dividend payments. When compared to other investment options, blue chips are way safer because they provide strong earnings and less fluctuating prices for their shares.
Are you interested in investing in blue chip stocks? If yes, here's what Kal Hawari (Ottawa) wants you to know below:
● There are two main options for starting an investment in blue chip stocks. First, you can decide to start investing via online trading.
● An alternative and effective approach requires you to open a new brokerage account.
Brokerage accounts: brokerage cash accounts vs brokerage margin account
Opening a brokerage account is the next good step you need to take after deciding to start investing in blue chips. With a traditional brokerage account, you have two options; a brokerage cash account or a brokerage margin account.
A brokerage cash account only permits you to deposit money in your cash account on a brokerage platform. Of course, you need to do this before buying any securities. This is not the same as a margin account, which will allow you to borrow money to buy your blue-chip investments.
It's pretty simple; let's say you have $200 in your brokerage account. With a cash account, you can only buy investments worth $200 or less. However, with a margin account, you have the opportunity to buy investments worth more than your account balance. This is possible because a margin account will allow you to borrow extra money for the investment.
Although brokerage margin accounts have their benefits, you need to understand they also come with a lot of risks. "Margin call" is a term that brokerage firms may use if your investments end up failing. In this case, the firm will ask you to repay your margin debt immediately.
Where & how to get brokerage accounts in 2023?
Based on the opinion & research by Khaled Hawari (Ottawa), three reliable options for opening brokerage accounts today are:
● Online brokers
● Robo advisors
● Managed accounts
As a self-directed investor, going for an online brokerage account is a great move. It'll enable you to gain better access to manage your portfolio on your own.
However, if you're new to stock investment, going for a robo advisor will be a smart move for you. Apart from offering you automated management of your investment account, you can also rely on a robo advisor to provide you with human assistance on how to invest to get the best results.
For managed accounts, you're simply getting a full-service broker's help to manage everything regarding your investment account.
Brokerage accounts aren't just for the rich
Gone are the days when only the rich can afford to open a brokerage account. Today, however, these accounts are accessible to everyone interested in investing in stocks.
Today, a lot of discount brokers are available online for you to start investing in your favorite stocks. With many of these firms, you won't have to worry about any minimum balance requirements. Matter of fact, some brokers don't even require you to pay any commissions on your trades.