Choosing a Broker
In order to do any forms on transactions on the stock market, one of the people you will need is a stock broker. A stock broker is basically someone who is licensed to perform sales and purchase of securities listed in a stock exchange. They take several tests before getting the license to do the transactions. Normal people who do not have the license are not permitted to do the exchange. This is to ensure that the people performing the transactions have at least the basic experience and understanding on what they are doing.
Brokers work with brokerage companies. That is how they get their license, and also how they are able to have access to bigger pools of investments. Occasionally, brokers will give advice to what stocks are good to buy or what to sell. These are often referred to as the full service brokers. They may give you a variety of investment options to choose from so that you can have a more diversified portfolio and usually work with you one to one on your investment goals and risk appetite.
The other type of broker is known as the discount broker. Discount brokers do not give any advice at all. They simply receive instructions from the client and perform accordingly. Discount brokers are commonly found in brokerage companies that offer online platforms where you can sell and purchase securities through the internet. Your request is sent through the platform to the broker who then performs the transaction on the stock exchange.
It must be clear however, that brokers are different from stock market analysts. A stock broker's main job is to perform the transaction as requested by their clients - the buying or selling of securities. They may have general knowledge as to what factors may move the market, but they are by no means the specialist trained to analyze market shifts.
Investors should bear in mind that brokers work mainly on commission. They charge a certain percentage of the transaction as their brokerage fee. Different brokerage firms offer different percentages. Some also offer a fixed fee for each transaction. It is important for investors to note this so that they can deduct the brokerage fee to calculate their real profit or loss.
Full service brokers usually charge higher than discount brokers but that is the price you pay for their service of giving you advise and investment choices. So unless you are experienced with how the stock market works, it is recommended to start off with full service brokers. But sometimes, taking things into your own hands can be quite challenging as well. It really boils down to how much risk are you willing to take. - 23199
Brokers work with brokerage companies. That is how they get their license, and also how they are able to have access to bigger pools of investments. Occasionally, brokers will give advice to what stocks are good to buy or what to sell. These are often referred to as the full service brokers. They may give you a variety of investment options to choose from so that you can have a more diversified portfolio and usually work with you one to one on your investment goals and risk appetite.
The other type of broker is known as the discount broker. Discount brokers do not give any advice at all. They simply receive instructions from the client and perform accordingly. Discount brokers are commonly found in brokerage companies that offer online platforms where you can sell and purchase securities through the internet. Your request is sent through the platform to the broker who then performs the transaction on the stock exchange.
It must be clear however, that brokers are different from stock market analysts. A stock broker's main job is to perform the transaction as requested by their clients - the buying or selling of securities. They may have general knowledge as to what factors may move the market, but they are by no means the specialist trained to analyze market shifts.
Investors should bear in mind that brokers work mainly on commission. They charge a certain percentage of the transaction as their brokerage fee. Different brokerage firms offer different percentages. Some also offer a fixed fee for each transaction. It is important for investors to note this so that they can deduct the brokerage fee to calculate their real profit or loss.
Full service brokers usually charge higher than discount brokers but that is the price you pay for their service of giving you advise and investment choices. So unless you are experienced with how the stock market works, it is recommended to start off with full service brokers. But sometimes, taking things into your own hands can be quite challenging as well. It really boils down to how much risk are you willing to take. - 23199
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