12/29/2011
Modern technology has created an opportunity for consumers to try their hand at investing in the stock market without the need for industry representative involvement. Internet-based brokerage accounts are available from a number of reputable investment firms, allowing the do-it-yourselfers to buy and sell stocks, bonds and other securities at will, often for a fraction of the cost usually associated with traditional investment accounts. Opening an online brokerage account takes minutes, and the process is streamlined to be efficient and easy enough for even the most unsophisticated consumers.
Step 1
Assess your goals and needs. Investing in the stock market involves risk, and there is no guarantee that you will make money. You may lose money if the investments you choose perform poorly. Evaluate your needs to determine if a brokerage account is really appropriate for your situation, and consider what you expect out of such an account.
Step 2
Calculate your financial capabilities. You must deposit money into a brokerage account to initiate transactions involving securities and other variable products. Examine your existing resources to determine how much you can comfortably deposit into a brokerage account, and how much you can realistically contribute on a regular basis.
Step 3
Compare online brokerages. Examine the information available from several different Internet-based brokerage firms. Focus on the initial minimum deposits necessary to begin trading, the fees for each transaction, additional service charges or maintenance costs and the type of customer service the firm offers. Choose an online brokerage account provider offering an account suitable for your given financial capabilities and level of sophistication.
Step 4
Complete account-opening paperwork. Revisit the website of the firm offering the brokerage account you chose. Click the links to initiate a new account application. Enter your information in the relevant fields, making sure to answer all questions about your personal identity and financial industry affiliations. After verifying the accuracy of your responses, submit the online form.
Step 5
Arrange your initial deposit. Once you receive confirmation that your account application has been approved, make arrangements to fund your new brokerage account. Typically, most Internet-based firms allow deposits via electronic bank wire transfer or personal check. Locate the relevant information necessary to transfer money and provide those details to your current financial custodian.
Step 6
Verify the receipt of your initial deposit. Continue logging into your new brokerage account to check your contribution's status. Look for a change in your account value equal to the amount of your deposit. Many online brokerage firms will also send account owners an automatically generated email notifying them that a new deposit has been received.
Tips
Most online brokerage accounts provide multiple tools and resources to assist you in choosing investments with a higher possibility of increasing in value. Be sure to utilize these tools before committing to any purchase.
Warnings
Make sure your goals are not unreasonable or unrealistic and your needs substantiate your desire for an investment account of this type.
Some Internet-based brokerage accounts provide very little live customer support, leaving consumers without the advantage of an experienced representative. Other firms offer assistance with trades but for an increased cost. Be sure to examine these features before actually opening an account.
References
The Street: Getting Started: How to Open a Brokerage Account
Resources (Further Reading)
FINRA: What to Expect When You Open a Brokerage Account
FINRA: What to Expect When You Open a Brokerage Account
Author Bio
Gregory Gambone is senior vice president of a small New Jersey insurance brokerage. His expertise is insurance and employee benefits. He has been writing since 1997. Gambone released his first book, "Financial Planning Basics," in 2007 and continues to work on his next industry publication. He earned a Bachelor of Science in psychology from Fairleigh Dickinson University.
Gregory Gambone is senior vice president of a small New Jersey insurance brokerage. His expertise is insurance and employee benefits. He has been writing since 1997. Gambone released his first book, "Financial Planning Basics," in 2007 and continues to work on his next industry publication. He earned a Bachelor of Science in psychology from Fairleigh Dickinson University.
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