The basic game of investing is as follows: you buy stocks from an investment firm, specifically a broker, in the form of cash, borrowing on margin, or reinvesting your dividends.

There are various places you can purchase stocks from

• Full-service investment firms: you pay fees and commissions for the investment advice they provide you, and for buying and selling stocks
• Discount brokerages: online firms that require lower commissions because you don’t get advice on investments
• Portfolio Managers: these advisors focus on clients with a higher overall net worth of usually over $250,000

Opening an investment account

• Cash account: the most common type. It allows you to pay cash for your stocks
• Margin account: the type you open if you want to borrow from your investment firm to invest
• Registered plans: RRSPs, RESPs and TFSAs. These are always cash accounts

Buying and selling stock

1. What you want to buy or sell: your choice may allow you to place multiple trades on one order
2. How much you want to buy or sell: you may need to purchase a minimum amount of stock
3. The price you want to pay: will determine whether you will make a market or limit order
4. How you want to pay: you can use money from your cash account, or borrow to buy stocks

Dividend Reinvestment Plan (DRIP)

A DRIP allows you to automatically reinvest dividends by buying more shares without paying a commission. DRIP is usually offered by larger companies with a history of paying dividends.

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