Instead of getting involved in messy money games, it’s better to get down to business and start stock investing.
When it comes to stocks most people’s thoughts are bankruptcy, big ears, and dumping their money. In fact, stocks are not as scary as everyone thinks.
To invest in stocks is to invest in a company. When you are optimistic about the future prospects of a company, you can invest in that company by buying shares of that company, and you can also say that you are one of the shareholders of that company.
When that company makes money, it gives back some of its earnings to shareholders in the form of dividends. When the company makes money, the share price also goes up, at which point the shareholder also earns a profit on the share price.
Here are the 3 things you must know before opening a stock trading account.
3 things you must know before opening a stock trading account
1. Open a Direct CDS or Nominee CDS account
There are two types of stock accounts: Direct Account (CDS) and Nominee Account, the biggest difference between these two types of stock accounts is that Direct Account is directly signed by the investor, while Nominee Account is signed by the bank and is affiliated with the investor.
The commission for Direct CDS will be lower than Nominee CDS, and you can also receive annual reports from listed companies directly.
2. Choose a Stock Broker
Next, you need to choose which stock broker you want to open a stock trading account with. At present, there are stock brokers that offer stock trading accounts, including Hong Leong Investment Bank, Maybank Investment Bank, Kenanga, MPlus and so on. Each brokerage firm has different commissions, so you can choose a brokerage firm with good service and low commission.
3. Choose the type of account
Generally speaking, there are two types of stock trading accounts offered by each brokerage firm, namely Cash Upfront Account and Margin / Contra Account.
Cash Upfront Account is an account where you have to deposit a sum of money before you can trade stocks, and Margin / Contra Account is an account where you can borrow money from the brokerage firm to buy stocks, which is not recommended for newcomers because of its high risk.
