Here’s something most investors don’t know: they don’t actually own their stocks. Their brokers do.
That’s right -- when you buy stocks through a brokerage, unless you follow the strategy we’re about to outline, then it’s likely that the brokerage, not you, controls your holdings.
Brokers can -- and do -- loan out your stocks to short sellers (for a fee that you never see, of course). They, not you, receive updates from the companies in question. Brokers can use your stocks as collateral for a loan.
Registering stocks through your brokerage -- which most people do without even realizing it -- is a bit like holding money in a bank: You see the digits when you log onto your account… but the bank is probably loaning out the actual money to others. The money isn’t really there.
So how do you own stocks outright? People used to hold physical (often quite beautiful) stock certificates, but buying physical certificates these days is expensive, cumbersome and often difficult to integrate into the system… a bit like using a typewriter instead of a computer at work.
The safer way to own stocks is through Direct Registration. In this alert, we’ll talk about what Direct Registration is, how it works, and how you can take advantage of it so that Apple knows that you, not your broker, owns all those securities.
Full ownership is a smart aspect of a robust Plan B. Find out how to implement it here.
That’s right -- when you buy stocks through a brokerage, unless you follow the strategy we’re about to outline, then it’s likely that the brokerage, not you, controls your holdings.
Brokers can -- and do -- loan out your stocks to short sellers (for a fee that you never see, of course). They, not you, receive updates from the companies in question. Brokers can use your stocks as collateral for a loan.
Registering stocks through your brokerage -- which most people do without even realizing it -- is a bit like holding money in a bank: You see the digits when you log onto your account… but the bank is probably loaning out the actual money to others. The money isn’t really there.
So how do you own stocks outright? People used to hold physical (often quite beautiful) stock certificates, but buying physical certificates these days is expensive, cumbersome and often difficult to integrate into the system… a bit like using a typewriter instead of a computer at work.
The safer way to own stocks is through Direct Registration. In this alert, we’ll talk about what Direct Registration is, how it works, and how you can take advantage of it so that Apple knows that you, not your broker, owns all those securities.
Full ownership is a smart aspect of a robust Plan B. Find out how to implement it here.
Here’s something most investors don’t know: they don’t actually own their stocks. Their brokers do. That’s right — when you buy stocks through a brokerage, unless you follow the strategy we’re about to outline, then it’s likely that the brokerage, not you, controls your holdings. Brokers can — and do — loan out your stocks…
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