19% of Americans Are Investing More. Here's How to Find the Right Brokerage Account
- Recent data reveals that Americans are eager to put more money toward investments.
- There are certain things to look for when opening a brokerage account for the first time.
You need the right tools to be a successful investor.
If you don't have enough money in your savings account to cover three full months of essential expenses, then you need to make building an emergency fund your first priority. Similarly, if you have costly debt, like a credit card balance, hanging over your head, then you should work on whittling it down to $0 before putting your money to work elsewhere.
But if you're good on emergency savings and have no unhealthy debt, then it may be time to start investing. And if you're eager to begin, you're in good company. A good 19% of Americans are investing more in 2022, according to Northwestern Mutual's most recent Planning & Progress Study.
But being a successful investor hinges on finding the right place to put your money. Here's how to find the brokerage account to use.
1. Avoid fees as much as possible
These days, most brokerage accounts do not impose a fee every time you trade a stock. But there may be other hidden fees at play, like inactivity fees (which apply if you let your account sit dormant for too long). Do your best to avoid fees when seeking out a place to invest. All those fees will do is eat away at your returns, making it harder for you to grow wealth over time.
2. Look for the option to buy fractional shares
More and more brokerages these days are allowing investors to purchase fractional shares. And there's a big benefit to going that route.
Fractional shares make it possible to invest in companies when a full share price is out of reach financially. Say you want to put money into a company with a stock price of $1,000 per share. If you only have $250 to invest with, that's okay. You can purchase a quarter share of that company and enjoy the same benefits you'd get with a full share (to be clear, that means still getting to collect dividend payments, albeit at a proportional rate).
3. Focus on ease of use
You may find a brokerage account that doesn't impose fees and offers a wide range of investing choices. But if that account is difficult to navigate, you won't be motivated to use it. And that might stop you from investing more and meeting your various goals.
That's why it's so important to find a brokerage account you won't have difficulty using. Most major brokerages let you play around with their platforms before committing money, so it pays to do those trial runs and see where they lead you.
The fact that Americans are investing more is a good thing, because the reality is that investing is a great way to not only grow wealth, but also, maintain buying power in the face of inflation. If you're not sure which brokerage account to open, try a few different ones out before making that call. Given that you might keep your money invested for decades, it's worth spending some time exploring your options to find the best fit.
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