Don’t open a brokerage account until you’ve checked this one key thing.
- There are many different online brokerage firms you could invest with.
- You’ll want to consider different features of each brokerage firm when choosing one.
- Making sure you can buy the investments you want is a major factor.
When you want to start investing your money so you can grow your wealth, you’ll need to pick a brokerage firm. The good news is, there are a huge number of discount online brokers. And many of them offer very attractive features such as no minimum balance and no commission fees.
You’ll want to consider a variety of different factors, including the cost to buy investments, the types of accounts available, and the research offerings available when you decide which broker to invest your money with.
But while these features are important, there’s one factor to look for that you should prioritize above all others. Here’s what it is.
This is the single most important feature to look for when picking an online broker
When you are looking into different brokers to invest with, it’s absolutely crucial to make sure that any financial institution you are considering will allow you to buy most or all of the investments you’re interested in.
See, there are many different assets you could invest in, including individual stocks, mutual funds, exchange-traded funds, bonds, certificates of deposits, and cryptocurrencies. And while many brokerage firms can offer you a good mix of different kinds of assets, there is variety in what you can invest in among different brokers.
Some brokers, for example, do not allow you to buy cryptocurrencies, or allow you to buy only the most popular coins rather than offering a wide selection of altcoins. Others provide proprietary mutual funds, while still others provide lots of choices when it comes to ETFs with low expense ratios and no commission fees. On the other hand, some discount online brokers may limit the range of equities they have available.
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You’ll want to make sure you understand exactly what types of investments you can buy with any broker you’re looking at. And if there is a particular type of asset you want to purchase, you’ll also want to confirm you can gain access to it once you’ve put your money in your brokerage account.
Why is this the most important feature?
The mix of assets available with a brokerage firm is the most important feature because ultimately it is the performance of your investments that makes the biggest difference in how big your portfolio balance grows.
If you have done a lot of research, developed an investment thesis, and you want to buy a particular mutual fund or cryptocurrency, for example, it could be a major disappointment if you aren’t able to make the assets you want part of your investment mix. And if it turns out you were correct that the asset you wanted to buy earns generous returns, you’ll have missed out on the chance to earn a big profit just because your brokerage firm didn’t offer the access you needed.
The good news is that you can usually find out in advance what types of investments each broker makes available. So take the time to explore the different asset classes each broker provides access to and choose the broker that’s right for you based on your investing goals.