How To Own Stocks
What is a stock?
A Stock, which can also go by "Equity", is a security that represents the ownership of a fraction of a corporation or a startup business. This entitles the stock owner to a proportion of the corporation's assets and profits equal to how much stock they own. Units of stock are called “shares”.
How to start investing?
To start investing in stocks, you'll first need to decide how you want to invest your money in the stock market.
You will need to determine your investing approach. Some people will invest in individual stocks, while some others will take a less active approach.
There are different ways to buy into the stock market.
You can buy individual stocks only if you are the kind of person who has time, patience, and the desire (no matter how little) to research and evaluate stocks daily thoroughly. If that's the case, I totally encourage you to do that.
You can buy in index funds. It tracks a stock index like S&P 500. If things like quarterly earnings reports and average mathematical calculations don't sound like fun, there is nothing wrong with taking the passive approach.
2nd option, you can also invest in mutual funds. A mutual fund splits your money between different investors in a group of investments like stocks and bonds.
3rd option is Bonds. Bonds are fixed instruments that represent a loan made by the investor to the borrower. Look at it as an IOU between the borrower and the lender, which will include in detail the loan and the payments.
All this to say, there is no specific way to get into the stock market. You choose the best option that reflects you. Are you willing to risk it, or do you prefer to be cautious?
Online Broker, Discount Broker & Robo-Advisor?
There are many ways to get into the stock market, but the real question is, how to get in? Do you go through a bank or a website online? Let's compare them all.
Online Broker:
A Broker is either a full-service or discount kind of broker. A Full-Service broker will give the full range of traditional brokerage services along with financial advice for retirement, healthcare, and everything else related to money. They usually with high net-worth clients. They charge a large fee, including a percent of your transactions, a percent of your assets that they manage, and maybe a yearly membership fee.
Minimum account Size: $25,000.
Discount Broker:
A Discount Broker will give you the tools to select and place your own transactions. As the space of financial service has evolved. Discount online brokers offer more features, including educational materials on their platform. They offer a set-it-and-forget-it Robo-advisory service as well.
Minimum account size: 0 or very low.
Robo-Advisor:
The Robo-Advisor is a stockbroker you never see, never communicate with. That's because it's all done automatically. The Robo-Advisor will invest your money on your behalf in the appropriate portfolio for your age, risk tolerance, and investing goals. Not only can it select your investments, but it will also optimize your tax efficiency and make changes accordingly overtime automatically. An option that has dramatically exploded in the recent years is a Robo-advisor.
Top 4 recommended stockbrokers
Based on public reviews and industry rankings,
Here are four of the top recommended stockbrokers in Canada:
It will consist of online brokers (Real humans) and Robo-Advisors (AI's).
Questrade is a Canadian online discount broker that offers a wide range of investment products, including stocks, options, and ETFs, with low fees and commissions. They are also known for their user-friendly platform and excellent customer service.
TD Direct Investing is one of Canada's largest online brokers, offering a broad range of investment products and services, including stocks, bonds, options, ETFs, and mutual funds. They are also known for their excellent customer service and investor education resources.
Interactive Brokers is a US-based online broker that offers access to global markets and a wide range of investment products, including stocks, options, futures, forex, and bonds. They are known for their low fees and commissions and powerful trading platform.
Scotia iTRADE is the online brokerage arm of Scotiabank, offering a broad range of investment products, including stocks, options, ETFs, and mutual funds. They are also known for their competitive fees and commissions and user-friendly platform.
Based on public reviews and industry rankings,
here are four of the top recommended stockbrokers in U.S:
It will consist of online brokers (Real humans) and Robo-Advisors (AI's).
Fidelity is one of the largest online brokers in the United States, offering a wide range of investment options and tools. They are known for their low fees and excellent customer service.
Charles Schwab is another popular online broker, offering a wide range of investment options and research tools. They are known for their competitive fees and excellent customer service.
TD Ameritrade is a popular online broker, offering a wide range of investment options and research tools. They are known for their user-friendly trading platform and excellent customer service.
ETRADE is another popular online broker, offering a range of investment options and research tools. They are known for their low fees and excellent customer service.
Please note that this is not an exhaustive list, and there may be other stockbrokers that meet your specific needs and preferences. It's essential to do your own research and choose a broker that aligns with your investment goals and risk tolerance.
Wealthsimple
Wealthsimple is an excellent online investment platform that offers a variety of investment options, including stocks, ETFs, and socially responsible investing portfolios. Their platform is user-friendly, making it easy to create and manage your investment portfolio. They also provide useful resources and tools to help you make informed investment decisions. One of the standout features of Wealthsimple is their competitive fees, which are significantly lower than traditional investment advisors. Their customer support is also top-notch, providing fast and helpful responses to any questions or concerns.
Overall, Wealthsimple is an excellent choice for anyone looking for a simple and affordable way to invest their money. Full Review
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