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Traditional Brokers vs. Discount Brokers

A successful financial portfolio includes such components as 401k plan, a Roth IRA, the purchase of a home and a six-month emergency fund. Additionally, to provide for the success of your portfolio you should pay back all your credit card debts. But, a financial portfolio must include more than just these elements. Other investment opportunities should be considered such as the opening of a brokerage account, which will further increase your profits.

Brokerage Account Opportunities to Consider

The range of financial opportunities that an account with a brokerage firm will provide you include investments in:

  • Mutual funds
  • Stocks
  • Bonds
  • Real estate through REITs
  • CD (certificate of deposit)
  • Treasuries and etc.

You have two options to consider when deciding on the opening of a brokerage account.

Option 1 Traditional Broker

This type of broker is recommended in case you prefer to create a closer relationship with just one person, your broker. This option provides you with the opportunity of being able to directly address him and knowing whom you are dealing with.

Option 2 Discount Broker

This option is for those of you who don't prefer the personal interaction of a broker and are willing to put the trades online. However, you are entrusting your money to someone you don't know. This drawback is compensated by the fact that you will incur smaller trading cost.

On the other hand, some brokerage firms will provide you with both options. You can decide on one of them before opening the account.

No matter what your decision is, you should include other investments in your financial portfolio in order to increase your chances for greater profits.

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