Everyone has a dream of being very successful someday. We all want to achieve financial freedom and stability for ourselves and our families; to live a life that is devoid of worrying about rent, welfare for ourselves and family members, food and clothes on our backs et al. We all dream of a better life and that is why a lot of people fight so hard to achieve it. Etrade thus provides an avenue that can be keyed into in other to achieve this financial stability and freedom.
Etrade refers to an electronic trading company that is designed to provide people who invest in them the opportunity to buy and sell securities such as bonds, options, stocks, mutual funds et al. from their smartphones, computers, or other internet-enabled devices. This service allows investors to actively manage their portfolios and execute trades at their discretion.
Etrade as the name implies is all about electronic trading, and to get started you will have to first get your internet-enabled device and log into your brokerage account. In other to make a reasonable income from etrade, you will have to follow the rules that guide almost every other investment. You should endeavor to choose the investment plan that is the best at the right time and then buy it when it is cheap. You then need to hold on to this investment product until the price appreciates and then you can sell it off. In other to do this effectively, you have to try your best to predict when the price will peak. Predicting this can be quite difficult though, but if you are able to buy low and sell when the price is high, then you will be able to make a profit, while if the reverse happens you will run into a loss.
Prices of these securities that are available to trade in etrade are very volatile and thus they fluctuate a lot. Therefore, if you decide to go into etrading, you should be willing to hold your investments for a long time in order to ensure that your investments would appreciate in value. It, therefore, goes without saying that the most suitable funds to invest in etrade are those funds that you do not require at the moment and are willing to do without for a lengthy period of time that can run into a couple of years or even decades.
So how exactly does etrades work?
To get started with etrade, you will have to first get your internet-enabled device and log into your brokerage account. You will have to check your account and know the amount of funds you have in it and also how much stock and shares are available in your portfolio. You will also see some stock quotes that you can check to know the present buying and selling prices of stocks. When you have gathered this information, you can then enter your order and buy or sell the security that you have at hand.
Let us assume that you would like to buy about 500 shares from XYZ company, how would you go about this? First, you have to find out the price of an individual share by checking the price on the quote screen. For this example, let us assume that an individual share costs $25 at the time that you wish to make the purchase, then you should be willing to spend $12500 excluding additional charges. Your own broker will now have to send the order of your intended purchase to the stock exchange. If the company you want to buy from (XYZ in this case) trades on the stock exchange, the order will be sent there to the computer that is specifically dedicated to your broker-dealer. Once they confirm the receipt of the money, the transaction is said to have taken place.
When the whole process is completed, the stock exchange will send a message to your broker notifying him or her that the transaction has been completed. He will then have to in turn update the information he has received into your account, withdraw money from it, and put the charges on your portfolio so that the new stock will be reflected.
Risks involved in etrade
Every form of investment out there comes with its own risks and uncertainties and etrade is not an exception. Firstly, there is always the probability that the funds that you invested could fall so low in value that you will lose even all the money you initially invested. In order to reduce this risk, it is advised to invest in securities that are not so risky. The riskier an investment in etrade, the higher the potential payout. On the other hand, if you invest in something that is not too risky, the returns will be a lot smaller.
Individuals vary in personality and as a result, you should decide the amount of risk that you are willing to take as a person. You should invest an amount of money that you will be comfortable losing. On no account should you ever make use of your life savings to invest in etrade because, no matter how safe you think an investment is, there is always the probability that it could go bad and you will run into a loss. A financial advisor can also help you to make the right decision.
To say the truth, it can be quite a gamble when investing in etrade but with the right amount of research, it would be a calculated risk rather than just depending on blind luck to make things go well.
Charges
Just like every other company that offers financial services, making use of etrade comes with a few charges. You should endeavor to know how much you are being charged and as well ensure that you are not being charged exorbitantly. If they charge you based on every transaction you make, then you will have to contemplate your transactions and ensure that they are worthwhile.
There may also be monthly fees that are charged by the etrade company for holding your funds. If this is the case, then you should ensure that you are making enough money from the investments that can offset the charges that accrue on your account and also be able to make consistent profits. You should calculate what they charge will be overtime and then make an estimate of how much money you think you will make from that investment within the time frame in question.