A holder of an account opened with a broker can buy and sell a variety of financial instruments – stocks, bonds, funds, futures, options, and so on.
It provides access to financial markets and trading instruments, allowing its holders to invest money for a profit. The brokerage account also enables to receive information about the investment position and market conditions, thus helping investors to make informed decisions.
Why Do You Need a Brokerage Account?
It would make sense to open an account and use brokerage services to:
invest in companies’ stocks and receive a part of their profits, as well as in commodities – oil, gold, and other resources;
purchase bonds and earn income from corporate or government loans;
buy and sell various investment funds;
take part in IPOs – initial public offerings of companies’ stocks;
trade options and futures, as well as currency on the foreign exchange markets (Forex);
ensure long-term and safe wealth creation;
use various investment strategies, as well as control and manage an investment portfolio.
All of the listed actions can be performed through an intermediary – a brokerage company.
Advantages of a Brokerage Account
An account opened with a broker provides:
- Access to financial markets, allowing to invest in a variety of instruments – securities, units, bonds, currencies, and so on.
- Plenty of investment opportunities to collect a portfolio containing different types of assets, including uncorrelated ones.
- Access to analytical information and expert advice that contribute to making right decisions that don’t contradict the market situation.
- Prompt buying and selling of assets on the market due to strong liquidity.
- Risk management with effective tools – stop-loss orders, different types of orders, and so on.
- Transparency in monitoring investment transactions.
- Access to detailed information about an investment portfolio.
- Opportunity to use a variety of investment strategies, which makes it possible to adapt an investment portfolio to financial goals of current concern.
- Risk diversification through investment allocation between different assets with a view to reduce the portfolio dependence on a single market or company.
Modern brokers offer their clients online platforms and mobile apps, which they can use to manage their brokerage accounts without any restrictions. It’s convenient and provides round-the-clock access to controlling means and tools. At the same time, a broad range of cybersecurity tools ensures the utmost level of the clients’ investment funds and personal information security.