So you’ve decided to become an investor, but how do you go about actually buying shares?
Actually, legally, you can’t.
Shares can only be purchased by a licensed professional called a stockbroker. These are licensed and accredited professionals who ensure that trades are conducted with all the necessary legal and regulatory procedures. A stockbroker will buy and sell shares on your behalf in exchange for a fee.
Stockbrokers, therefore, act as a middleman between investors and the market. Much like if you’re feeling unwell, a doctor provides you a prescription, and the pharmacist fulfills that prescription. This is essentially the function of the stockbroker.
In the past, stockbrokers charged high fees and usually insisted on minimum deposits that were outside the realm of the average worker. These days, the internet has given birth to discount brokers that compete on pricing and usually have no minimum deposit restrictions. This has opened up investing to the masses.
However, it comes with a downside.
Brokers in the past also provided advice as part of their fee. Discount brokers provide no such service, which means that investing is very much a do-it-yourself endeavor.
That’s where MyWallSt comes in. We want to help educate and guide users throughout their investing life, giving them the tools to invest with confidence.
However, the fact remains, you still need to engage a broker in order to buy and sell shares.
In the next lesson, we’ll look at how you go about setting up a brokerage account.