Stocks

Choosing the Right Stock Broker

When you are making stock investments to make profits for the future, you are using your hard-earned money. To help avoid investing in the wrong stocks and losing your money you need to find the right professional stockbroker. You need one that you feel comfortable with and trust. You also want them to guide you precisely on which stocks to invest in and can keep the economic scenario in mind. Finding the right stockbroker can be a hard task as there are many online and off line stockbrokers to choose from.

One of the first things that you need to decide is whether you need a discount broker or a full service broker.

• Discount broker-they do not give advice or guide you but instead will only invest in stocks that you tell them to invest in. You will be the one that decides the investment strategy. Their fees are less because they give no financial advice.

• Full service broker-they will guide you on the type of investments that you should make, and which stocks you should invest in, depending upon the financial goals you have set up. They offer a wider variety in the terms of financial products, which include annuities, bonds, stocks, insurance, and derivatives. They also charge a high fee for their expertise knowledge.

When you choose an online broker it is important that you check the quality of customer service that the brokerage firm offers. One example is if you cannot access your computer can you still get your account information provided to you over the phone. You should also ask if the website is slow could you call and speak to a stockbroker personally. Make sure that you do your research before choosing an online broker.

Some brokers will ask that you make a minimum deposit to open an equity account, which mean the more money you have to invest the more options you will have to hire a broker. Before choosing a stockbroker ask if there is are any financial requirements that need to be met. Check to see if the brokerage firm is a member of the National Association of Securities Dealers (NASD) because if they are this means that they will be fair in their dealings. You should also check to see if they have a membership in the Securities Investor Protection Corporation (SIPC). This membership will protect your assets in a brokerage account for as much as five hundred thousand dollars. This even covers if the brokerage firm fails. If you have chosen a full service broker, make sure that they do not unnecessarily recommend that you place a trade every now and then because they earn a bonus every time you trade.

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