On a long-term basis, the stock market is one of the best places you can invest in to generate significant profit in return. However, you can’t just call a company out of a sudden and ask them to take your money in exchange for some of their shares.

To start investing in stocks, you’ll need a stockbroker or a brokerage account.

What are stockbrokers and brokerage accounts?

A stockbroker is sort of your middle man of any given stock exchange. By charging a commission for every trade they’re involved in, they make your stock’s information (and the fact that you’re selling) public to the market and then get you in touch with potential buyers. They can also help you buy out stocks instead.

In the old days of stock market investing, people had to give a phone call to an individual or a business (usually the former) who carried out a stockbroker’s work, who would then act on your behalf. However, the industry has noticeably evolved with the pass of time.

Nowadays, entire brokerage firms exist, which allow you to open a brokerage account that enables you to carry out the process online by yourself, but with enough tools and services to heavily assist you on the matter. Easy and practical.

In terms of popularity, brokerage accounts have been dominating over their predecessors among investors but, if you know where to look, you can still find a stockbroker that might be of service to you.

Here are some examples of what they might offer to you in the present to help you choose your better option out of the two alternatives.

Modern Stock Brokers

When it comes to people or businesses that still offer you direct assistance with facilitating today’s stock exchange, you can find them belonging to any of the following two categories:

  • Discount brokers: Those who focus almost exclusively on helping you buy or sell stocks with a simple phone call. They tend not to offer any other supplementary service or advice. Instead, they focus on the very basics of the stockbroker business. As you might expect from the name of the category, their fees are remarkably low. If you need an accessible option, they might be what you need.
  • Full-service brokers: Closer to the services offered by the stockbrokers of old, full-service brokers tend to appear in the form of full-size companies that still employs humans that can assist you in making a trade. Their fees are noticeably high, but they offer advice, options to invest in, recommend investment plans to cover needs (such as retirement) and have a strong customer support network to keep themselves strong amidst their customer base.

Features offered by brokerage accounts

When it comes to brokerage accounts, their respective features easily make them stand out against an old-fashioned stockbroker system.

Some of them are, but are not limited to:

  • Low commissions: For what they offer in return, you can see their costs lower than what they could be valued for. Some brokerage accounts by themselves can be provided for free, only charging for some additional services that you might or might not need later on. 
  • Mutual funds: Some brokerage accounts offer access to mutual funds, which you can invest in. Keep in mind that usually, they tend to be charged separately from the initial opening of your account and are rarely offered for free.
    • Account minimums: While many brokerage accounts require a minimum amount already set before truly becoming yours, some brokerage accounts minimums are so low that you might not even notice their respective cots.
  • Trading platforms: Most brokerage accounts already offer their online trading software with a simplistic and user-friendly approach. They are making it all easier for you to do everything on your own without any complication.
  • Research and scanners: Most brokers offer a diverse range of third-party research that you can consult to evaluate your potential investments better.

Helping you kick-start your investment

Depending on the type of account you are interested in investing in, the money you will need to cover its respective costs might vary.

Here are our recommendations for how much money you should have saved up in advance before starting investing:

  • To cover the paperwork expenses and maintain any mutual funds accounts, you could start with around $1,000.
  • For Exchange-traded funds, depending on which fund you are basing your investment in, it can require $100 per share to $275 per share.
  • For stocks, it depends on which company you are interested in buying stocks from. Some high-tier examples: Ford will require about $11 per share, while Facebook will need about $200 and Amazon more than $1,700.

However, remember that brokerage accounts are either free or extremely cheap for what they truly offer, so, in the long-run, your investments will most likely be cost-effective.

Some broker suggestions

After having run through the many benefits of dealing with a physical stockbroker, or having a brokerage account, here we present you with some recommendations from our part:

Brokerage Accounts

  • TD Ameritrade
  • Robinhood
  • Vanguard
  • Fidelity Investments

Stockbrokers

  • Interactive Brokers
  • SoFi Active Investing
  • Cash App Investing
  • WeBull Investing