Understand The Importance of Trade Certificate

1. Understand The Importance of Trade Certificate tananet.net/understand-the-importance-of-trade-certificate One of the most important documents when you are planning to invest in the stock market is the Trade Certificate. This is issued by the Securities and Exchange Commission (SEC) to the investor and serves as proof that the investor has traded in the securities. The Trade Certificate is important because it serves as a proof that you have indeed transacted in the securities and are entitled to claim your dividends accordingly. If there is a deficit in the payment of dividends, the investor can submit a claim on his Trade Certificate. The certificate, unlike other investment reports or papers, is not required to be provided with by the companies. This is a decision that an investor has to take. The certificates are issued for a particular period of time and they cannot be renewed. There are a few reasons why the certificates are required and this is mentioned below. How the certificate helps to avoid paying high brokerage? First, the certificate allows the investor to avoid paying high brokerage fees. There is a minimum requirement for the investor to open an account. It is to be noted that the minimum is different for each broker. The idea here is to find the cheapest service available to the investor. Secondly, it helps investors to decide on their investment strategy. If they get into investments without knowing the basics of the portfolio, they might end up losing all their money. This is something that nobody wants to happen. The idea is to keep the risk to a minimum. The third reason is related to the tax issues. Investment certificates do not come under the scope of income tax. Most investors prefer to earn dividends from their investments and pay taxes on the capital gains. This means that the certificate will be considered as a pre- tax investment and this means that the investor will have to pay taxes on it irrespective of whether he receives any dividends. On the other hand, a Trade Certificate is always considered as an after-tax income. The other advantages of trade certificate There are many advantages associated with Trade Certificates. One of the major advantages is that the certificate protects the investor from unexpected shocks. For instance, if there is a sudden global financial crisis and the value of the dollar drops very much, the investor does not have to worry about losing all his money because of the impact of the economic crisis on the stock market. Investing in a Trade Certificate is very easy. The investor just needs to buy the right kind of certificate that matches his requirements. For example, if the investor requires a certificate that can help him reduce the tax, he should buy a Trade Certificate for this 1/2

2. purpose. If the investor wants to earn dividends, he can buy a dividend certificate. However, if he wants to invest for his own portfolio growth, then he can do so in the usual way. To buy these certificates, the investor needs to visit any online financial institution. The process here is simple and fast. However, due to the risk involved in these investments, it is important for the investor to run a background check on the company. The only way to avoid such risks is to invest in a company that is well known. However, if the certificate does not match the requirements, then it is necessary to cancel the investment. This is because, if the company is fraudulent, then nobody would be able to purchase the certificate. Therefore, cancelling the investment prevents people from getting cheated. However, before investing, it is always advisable to ensure that you have got the certificate from a trusted and genuine source. One can simply get the trade certificate services from websites like greaterbirminghamchambers.com. 2/2