If you are seeking to develop a long-term relationship with a financial adviser, we suggest you understand the motivation behind the advice you are given.
Every investor needs to know investing in the stock market requires a thorough understanding of the risks involved. With any investment there is a risk-return trade off based on a degree of uncertainty—the greater the risk, the greater the potential for return if that risk pays off.
When an investor purchases securities, the securities may be paid in full, or part of the purchase price can be borrowed from a brokerage firm. If funds are borrowed, an investor is trading “on margin.” In order to trade on margin, an investor must open a margin account.