Stock brokers are the middlemen between the stock exchange and the investor who wants to make money trading stocks. Millions are at stake in the stock market and only the best stock broker can help you make money by buying and selling stocks on your behalf. Because most stock markets require a broker to trade for you, you will have to look for a broker who is capable and reliable.
Full-service brokers give advice about the right stocks to buy and when to purchase or sell them. Of course the final decision is in your hands. Brokers also enhance your portfolio and even fix it if it is messed up. For those more experienced in the stock market and its procedures, a discount broker might be the best stock broker for you.
Discount brokers charge cheaper commissions because they don’t need to do research, work on your portfolio or give you advice as to which stocks to buy or when to do transactions. Full-service brokers do all that which is why they also charge bigger fees. A less experienced investor might be better off with a full-service broker but can eventually switch to a discount broker after gaining more experience in stock market trading.
Another factor to consider in choosing the best stock broker is the commission rates and fees involved. You can compare the rates of different brokers online. Find out what services are included in the fees and if they are worth paying for. Ask for the minimum amount required for you to trade with them. The rates can differ widely.
Discount brokers only charge $10 to 15 per transaction. Full service brokerage firms may charge as much as a hundred dollars. If you plan to invest a lot of money in the stock market and wish to trade stocks on a long term basis, the broker may consider lowering his fees and commissions. The more business you give them, the better you can negotiate for lower charges.
Watch out for hidden fees in the form of late payment fees, inactivity charges, low minimum balance fines, administration charges, insurance and fees for transferring funds. These hidden charges can shrink your profit margin significantly. A trustworthy broker will be very transparent about these fees. Ask about additional charges before deciding on a broker.
Speed is also an important factor that determines a loser from the best stock broker. The speed at which a broker reacts to the ever changing numbers can spell either profit or loss for an investor. Go with a smart broker who can make the right decisions and act quickly.