Securities trading refers to the buying and selling of tradable assets such as stocks, bonds, and other financial instruments.  Securities traders aim to generate profits by making strategic purchases and trades, often working independently or as part of a larger firm like an investment bank or private equity firm.

In investing, a “security” is an investment instrument such as a stock or bond.

There are a number of different types of securities, which include:

• Stocks: (Equities): Represent ownership in a company and offer potential for capital gains and dividends.
• Bonds: Represent debt obligations of entities like governments and corporations, providing periodic interest payments and return of face value at maturity.
• Mutual Funds: Pooled investment vehicles managed by professionals, offering diversification by investing in a basket of securities.
• Exchange-Traded Funds: (ETFs): Investment funds traded on stock exchanges, often tracking specific indexes or sectors.
• Real Estate: Investing in physical properties, either directly or through Real Estate Investment Trusts (REITs).
• Commodities: Investing in physical goods like metals, energy, or agricultural products.
• Cash and Cash Equivalents: Savings accounts, money market funds, and other highly liquid, low-risk assets.

Saving typically involves placing money in a low-risk, liquid account, such as a savings account or a money market fund, with the goal of preserving capital and earning a small return. Savings accounts are almost always insured. 

Investing, on the other hand, involves placing money in assets that have a higher potential for growth, such as stocks, bonds, or real estate, with the goal of generating returns over the long term.  Investing involves taking on more risk to potentially achieve higher returns, and can sometimes result in the loss of principal.

Risk tolerance is the level of risk an investor is willing to take given the inherent volatility in the value of their investments.  It is a quantifiable measure of the amount of loss an investor is prepared to accept within their investment portfolio.  Factors such as age, investment objectives, and income may play a significant role in determining a specific investor’s risk tolerance.

The risks of investing include (but are not limited to) the following:

• Market Fluctuations: Stock prices can fluctuate rapidly, leading to significant losses.
• Volatility: Investments can experience sudden and unpredictable changes in value.
• Economic and Political Events: Economic downturns, political instability, and regulatory changes can impact investments.
• Regulatory Changes: Changes in laws and regulations can affect investment strategies and returns.
• Interest Rate Changes: Changes in interest rates can impact bond values and returns.
• Liquidity Risks: Investments may not be easily convertible to cash.
• Counterparty Risks: Risks associated with the creditworthiness of counterparties in derivatives and other financial instruments.
• Operational Risks: Risks associated with the management and operations of investments.

The foregoing risks are not all-inclusive. Any investment in securities involves the possibility of financial loss that investors should be prepared to bear. The price of any security can decline for a variety of reasons outside of an investor’s control. When evaluating risk, financial loss may be viewed differently by each investor and may depend on many different risk items, each of which may affect the probability of adverse consequences and the magnitude of any potential losses.

Diversification is a strategy to manage risk by spreading investments across different asset classes and within those classes.  This approach can help to:

• Reduce Risk: By investing in a mix of assets, you can minimize the impact of a poorly performing asset.
• Enhance Stability: Diversification limits fluctuations in your portfolio, reducing volatility.
• Optimize Returns: By capturing gains from different sources, you can maximize your potential returns.

To create a diversified investment portfolio, an investor can consider the following:

• Diversify Across Asset Classes: Include a mix of stocks, bonds, real estate, commodities, and cash equivalents to reduce overall portfolio risk.
• Diversify Within Debt: Allocate debt investments across different credit qualities (government, high-quality corporate, high-yield) and durations (short-term, long-term).
• Diversify Within Equity: Spread stock investments across sectors, industries, and investment themes to reduce company-specific and sector-specific risks.
• Determine Appropriate Asset Allocation: Set target allocations for each asset class based on your investment objectives, risk tolerance, and time horizon.
• Regularly Rebalance: Periodically rebalance the portfolio to maintain the target asset allocation as market conditions change.
• Consider Non-Correlated Investments: Include investments whose prices do not ebb and flow with the daily gyrations of stock market indexes, such as bonds, CDs, gold, cryptocurrencies, and real estate.
• Focus on High-Quality Companies: Hold a mix of high-quality companies across various sectors and industries. High-quality companies for investing are characterized by strong profitability, financial strength, stable business models, high-quality management, and attractive valuations.
• Monitor and Adjust: Continuously monitor the portfolio and adjust it as needed to maintain the target asset allocation and minimize risk.

By following these steps and including a mix of securities, you can build a diversified investment portfolio that can help manage risk and optimize returns over the long term.

A stock index is a statistical measure that tracks the performance of a group of stocks, representing a particular market or sector.  Stock indexes are used as benchmarks to evaluate the overall performance of market, specific sectors or specific industries within the market.  Examples of well-known stock indexes include the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average.

No, trades can only be placed during market hours, 9:30 AM – 4:00 PM Eastern time on non-holiday weekdays. CDS1 and RQD do not permit after market hours orders.

No, trading will be closed for the following upcoming US market holidays. You won’t be able to trade on these days.

 US Market Holidays

• New Year’s Day
• Martin Luther King, Jr. Day
• 
President’s Day and Washington’s Birthday
• Good Friday
• Memorial Day
• Juneteenth
• Independence Day
• Labor Day
• Thanksgiving Day
• Christmas

Bank Holidays
Banking holidays may affect settlement times and cash transfer times. In addition to stock market holidays, the following upcoming US bank holidays are: Indigenous Peoples’ Day-Columbus Day and Veterans Day.

US Stock Market Half-Days
Stock market trading will close at 1 PM ET on the following upcoming US market half-days:
Day before Independence Day, 
Native American Heritage Day, the day after Thanksgiving Day and the Day before Christmas.

Buy orders are executed in near real-time.  For buy orders, you will see your investment reflected in your portfolio within a few minutes after purchase.  With sell orders, you will typically see the proceeds from your sale around two business days from the date the order was executed.

No, cash accounts can’t trade with unsettled funds.  The settlement period is the time it takes stocks or cash to reach their new destination after a transaction is executed.  Settlement typically occurs the next business day but could take up to two business days.

No. Since all trades are market orders, they typically cannot be canceled once the order is placed. For more information please review the CDS1 Customer Agreement.

When you buy a stock, you are purchasing a share of ownership in a company.  The money you pay goes to the person or institution selling the stock, not directly to the company.  Companies initially sell stocks to raise funds, but after that, the stock trades between investors on the stock exchange.

When you sell a stock, you are selling your ownership stake to another investor.  The money you receive from the sale goes to you, not the company.  Companies do not buy back their own shares from individual investors – the shares are traded between investors on the stock exchange.

The stock price is determined by the supply and demand of the stock on the exchange.  As more investors want to buy the stock, the price typically goes up.  As more investors want to sell, the price typically goes down. However, a number of factors can affect the price of a stock.

Stock prices are determined by the interaction of supply and demand in the market.  Factors that influence stock prices include a company’s financial performance, industry trends, economic conditions, investor sentiment, and market news and events.  Stock prices are constantly changing as investors buy and sell shares based on their assessment of a company’s future prospects and the overall market conditions.

An exchange-traded fund (ETF) is an investment fund that is traded on a stock exchange, like individual stocks.  ETFs are designed to track the performance of a specific index, sector, or asset class, such as stocks, bonds, or commodities. ETFs allow investors to get exposure to a wide range of assets within a single security.

Dividends are cash payments made by a corporation to its shareholders out of the company’s profits or retained earnings.  Key points about dividends:

• Cash dividends are the most common form of payment and are paid out in currency, usually via electronic funds transfer or a printed paper check
• Many companies issue dividends on a regular basis, typically quarterly
• Dividends are typically issued as either a flat number (e.g. $2 per share) or as a percentage of the stock price
• The payment of dividends is not mandatory and is at the discretion of the company’s board of directors
• Dividends are allocated as a fixed amount per share, with shareholders receiving a dividend in proportion to their shareholding
• Dividends provide shareholders with a return on their investment and can offer at least temporarily stable income
• Dividends are paid out per share, so the more shares an investor owns, the more they will receive when the company issues dividends
• Dividends are not classified as an expense on the income statement but rather a deduction of retained earnings on the balance sheet
• Preferred stocks have priority claims on a company’s income for dividend payments

The minimum buy order amount is $1.00, there are no sell order minimums.

Yes, you can buy fractional shares as low as $1.00.

Yes. Please contact CDS1 Securities LLC, your broker-dealer, to receive an Account Transfer Form. Please have ready your most recent account statement for the assets you wish to transfer.

Your financial institution does not provide tax advice. For specific questions, you should consult a tax professional. You can find your consolidated transaction history in the documents section of the investment portal which can be used as a record of gains and losses received from trades.

The cash and securities are held in your brokerage account at a qualified custodian, RQD* Clearing LLC. RQD is the executing broker of trades and custodies assets of all customers on behalf of CDS1. Please review your CDS1 Securities customer agreement for more information.

Only members over the age of 18 and in good standing with Frankenmuth Credit Union can buy/sell/hold securities. Commercial accounts may not be used.

You will have to either sell or liquidate all of your account positions or transfer whole shares to another broker-dealer before you close your credit union membership. Otherwise, you will need to speak with CDS1 regarding trades in your brokerage account after your credit union account has been closed. Please see the CDS1 Customer Agreement or speak with a CDS1 for more information on closing your account.

Buy and sell transactions and dividends paid are only able to be posted to a checking account at Frankenmuth Credit Union.  Closing the checking account will result in 1) the inability to place an order to buy a security and 2) sell transactions and dividends not being deposited to your Credit Union account

Depending on the assets you hold, you may receive dividends or cash disbursement due to a corporate action. You may also receive a return of cash that is excess funds left over by a purchase of an asset.

If you opted out of Crypto you can still use the Self-Directed Investment Portal if you opt back in using the form below. Note, if you opt in to the Self Directed Investment Portal, you will see the Crypto Portal and Crypto assets upon login.

Opt back in form >

For brokerage-related questions, please email info@cdsecurities.co or call 1-888-255-2740. We are equipped to address general inquiries and assist with the resolution of technical issues. We do not and are not able to provide financial or tax advice/consultation.

Members will receive emails in accordance with regulations from CDS1, AdvisiFi or RQD Clearing or phone calls from CDS1.  Examples of those communications include:

• AdvisiFi will email you if there are material changes to regulatory related communications such as the Customer Relationship Summary or the Disclosures Brochure.  They will also contact you if there are questions about your investment profile.
• CDS1 will email or call you if there are servicing related questions including clarification of questions answered during onboarding.
• RQD will email you to notify you that your statement and / or confirmation is ready for review. If you ever have questions about the legitimacy of a call or email, you can reach Frankenmuth CU directly and we will connect you to the appropriate contact.