Choosing a stock broker may seem rather easy, but choosing the right stock broker is very important. Stock brokers can give advice on investing, and assist customers by doing company and investment vehicle research One of the first rules of investing is preservation of your capital and some brokerage houses can expense your account to death. If you are trading frequently this cam become quite an issue to your account balance. Lets give you two sides of the stock broker argument and then you can make your own decision on which route you may take.
Full service stock brokers generally charge a flat rate for making your trades for you, but often attach percentages and other unexpected costs to each of your trades. Keep in mind stock brokers make money buying your stock and selling your stock. Full service brokers provide their customers with research beyond what many are able to do themselves and this works for many people Stock brokers can give advice on investing, and assist customers by doing company and investment vehicle research. Still you must use caution. Many times suggested by your broker are made because the brokerage house they work for has taken a position in the company being suggested. Many of these market makers exist today. Again their interest lies in making the trade , not necessarily making the client money.
Discount Brokers are completely different. Look at them as order takers. Discount stock brokers provide and execute a variety of trades at discounted prices. You make your decision call or connect with your broker online and minutes later your trade is completed. Online stock brokers’ fees are kept lower because they offer fewer services Discount stock brokers offer the buying and selling of stocks and typically do not research or give advice. However the savings in transaction fees can be significant. There are many online brokers who can trade equity for you for under $10.00.
Many people do not want to do their own research and rely on full service stock brokers for their needs. Still others want to call their own shots and revel at the opportunity for researching companies and find that hidden stock no one else has. I have used both and now rely on discount brokers and abiding to the number one rule of preservation of capital