There is an abundance of information out there about investing and because of this, it can sometimes feel overwhelming. However, investing is the common denominator in increasing your money over the long term, so you need to feel informed enough to start the journey.
The mall has lots of stores and department stores typically serve as anchors to the mall. For the purpose of clarity, today those department stores are going to represent brokerage houses.
Selecting a Brokerage is Similar to Selecting Your Favorite Department Store
A brokerage house is where you go to establish an account to invest in the market. Selecting a brokerage is quite similar to selecting your favorite department store. They all offer products that are along the same line, but differences in brand and price point may be quite substantial. Each brokerage house is equipped with its own characteristics, just like department stores. Target customers of department stores vary from working families seeking affordability to young and trending professionals that are in search of quality and style that can be found in only the most luxurious brands. Similarly, brokerages all carry stocks, bonds, etfs, mutual funds, but the type of offerings and prices that they charge could be different.
A Stockbroker is Similar to a Personal Shopper
If you have a large amount of money to invest and want to be assigned to a stockbroker, you would first find a brokerage that offers this service. This person would be like a personal shopper in some ways. They will offer recommendations on a variety of products and then proceed to take your money, make the investment and manage the investment, all for a fee of course.
Do You Prefer Self Park or Valet?
In the start, each brokerage house has its own minimum account balances you need to get started. There are some minimums that exist, sort of like self-parking, others require a minimum balance in the thousands, more like valet.
It is possible to purchase individual stocks at any brokerage, but there are certain mutual funds and index funds that are exclusive to a certain brokerage house. Think of it as the private label of the brokerage house. Somewhat like how department stores carry their very own brands that can only be purchased from their store.