Wednesday, August 3, 2011

How to Open a brokerage account

Quick and dirty guide to buy and sell stocks.

In order to buy and sell stocks you need to open a brokerage account. There's a lot out there to choose from. It basically ranges from cheap do-it-yourself to expensive hold-your-hand. I personally use Zecco.com for a its cheap $4.95 a trade. Meaning if I want to buy 1,000 Google stocks, it will cost me $4.95. On the other hand, if i wanted to buy 1 Google stock, it will still cost me 4.95$

> I refer to you to http://www.stocktradingtogo.com/online-stock-brokers/ for the top 5 stock brokers.

Opening a brokerage account requires you to submit a lot of personal information. They require your Social Security number, Driver's Licence Number, and the standard full name and address.

Once your account is open, it's time to fund it. That requires money (!) and your banking information. When I opened my account, I was uneasy with all the information I was sending them. It's been 3 years now though and nothing bad happened yet *cross fingers*. Transferring money takes about 3-5 business days to complete.



Once done, you have the means to buy & sell stocks. Now you must decide are you a long-term or short-term investor? Do you want to buy stocks in Amazon (AMZN) and hold on to it for a very long time? Knowing, through your research, its a solid company and it's the next virtual Wal-Mart. Or sell it as soon as you see a profit. Deciding what kind of investor you are depends on your personal risk preferences and your goal with the money. 

For starters I recommend going long. Invest in Exchange-Trade-Funds (ETFs) that track the overall market like SPY. ETFs are a mix of stocks managed by a computer that tries to closely resemble an industry, country, top 500 companies, whatever that ETF is advertised to do. Investing in ETFs is investing in easy mode. Though, investing is definitely not risk free.

Once you found your stock/ETF that your interested in, don't spend all your money in one day. Buy some this week and then buy some next week. The point is reduce your risk and average your price per share as the price changes. Seeing red for the first time on a stock you bought is scary. Don't panic sell. Do research, read the news, and make an informed decision. Investing long is to ride out the highs and lows of the market for years. You might get in trouble in your neighborhood. I got in one little fight and my mom got scared. She said, "Your movin with your auntie and uncle in Bel-Air!"

To be continued..

12 comments:

  1. Would be nice to get into stocks more to set up money for the future. Don't know how much I am willing to invest just yet since I don't know much about it. Considering putting about 500 towards in in lots of 100 to learn, not enough to make real profit but just to see if I lose or make money off it so I can prepare for larger amounts. Not that I have too much spare money as a poor student.

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  2. Cool man, this makes me want to look into trading.. pretty good little summary you have here.

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  3. Love blogs like this, so informative. Thanks for taking the time to write that. I'm not new to stocks but there was some advice that I wasn't aware of in this post, great tips.

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  4. i'm gonna be rich thanks to you.

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  5. Oooh interesting, I might just start buying and selling stocks now o;

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  6. Very informative, I will definitely be staying tuned.

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  7. Trading stocks and foreign currency has interested me for a while. I'm just curious as to how much capital is necessary to see a significant profit.

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  8. Well , quite interesting, I'm thinking try enter in the world of buy/sell stocks

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  9. ME and my father were talking about stocks not to long ago. He's hardcore into it, and i definitely want to check it out when i find myself responsible enough.

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  10. This is great advice. I was looking at getting a brokerage account. The best time to buy is when the market is correcting like right now. Thanks Obama!

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  11. Right now is a great time to get into stocks while they are falling. I am watching GE and madcatz. they fall anymore, I'm buying more.

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