How To Choose The Right Stockbroker For You
- Date: 2007-05-16 - Word Count: 568
Share This!
Experience shows that human nature wants the 'cheapest' or 'best value', but these are not always appropriate. As an investment professional, I can confirm that most members of the public have roughly zero investment skill. This is not meant to be derogatory, just realistic.
However, most members of the public also seem to think that investment is or should be 'easy' and as a skill has very little value added. If only it were so.
The reality is that most people have limited financial skills because these things take effort, study and thought. In our time away from an occupation, we want to relax, not analyse annual reports. But to be successful, we need to see a lot of annual reports before we find the one we really like. This is a real chore.
Therefore, the 'cheapest' stockbroker, by very definition, is the one who provides the lowest level of service. The cheapest brokerage is probably an online only firm or subsidiary and provides no advice or research. In life, you get what you pay for.
This low price may be very tempting, but if it means that we all need to carry out every piece of research and make every decision unaided, is it really good value?
If an investment is made that proves to be shockingly poor, and loses eighty or ninety percent of the money invested, was it a good deal to only pay a few dollars or pounds for the transaction? If a stockbroker had pointed out just how risky the deal was, might the investment funds have been saved? Would that have been money better spent than saved? If an extra thirty or fifty dollars spent on advice from a stockbroker could have saved one thousand, might that not be an acceptable price to pay?
The advent of the internet has had the impact of making information flow very freely and at very low cost around the world. In information terms, the difference between the 'haves' and 'have nots' has diminished drastically. In many cases, the difference lies simply between those who bothered to look and find the facts and those who did not. Yet understanding and interpreting the information is still a vital skill.
A different question, to which your author does not know the answer, is this: Has the ability to trade stocks online for under ten dollars or pounds per trade made us any better as investors? If the answer is no, and that as an individual a private investor does not have the required skills to flourish, might a higher price brokerage that offers research and guidance be more appropriate?
Whilst it is true that low cost dealing and lower minimum transactions have made equity markets more available to private investors with a limited budget, this may not be appropriate. Clearly it has expanded the number of trades being made, which stock exchanges and around the world must be grateful for. But, should an investor with very limited funds be investing in the markets?
Such questions clearly bring into focus the different potential level of services from a stockbroker and which might be appropriate for you. Most brokers offer more than one level of service and can often tailor their offerings to the needs of an investor. In the future, it might pay to ask how else a stockbroker can help you.
To read more articles about investment by Stuart Langridge, please visit: http://www.stockexchangesecrets.com/stockbroker.html
However, most members of the public also seem to think that investment is or should be 'easy' and as a skill has very little value added. If only it were so.
The reality is that most people have limited financial skills because these things take effort, study and thought. In our time away from an occupation, we want to relax, not analyse annual reports. But to be successful, we need to see a lot of annual reports before we find the one we really like. This is a real chore.
Therefore, the 'cheapest' stockbroker, by very definition, is the one who provides the lowest level of service. The cheapest brokerage is probably an online only firm or subsidiary and provides no advice or research. In life, you get what you pay for.
This low price may be very tempting, but if it means that we all need to carry out every piece of research and make every decision unaided, is it really good value?
If an investment is made that proves to be shockingly poor, and loses eighty or ninety percent of the money invested, was it a good deal to only pay a few dollars or pounds for the transaction? If a stockbroker had pointed out just how risky the deal was, might the investment funds have been saved? Would that have been money better spent than saved? If an extra thirty or fifty dollars spent on advice from a stockbroker could have saved one thousand, might that not be an acceptable price to pay?
The advent of the internet has had the impact of making information flow very freely and at very low cost around the world. In information terms, the difference between the 'haves' and 'have nots' has diminished drastically. In many cases, the difference lies simply between those who bothered to look and find the facts and those who did not. Yet understanding and interpreting the information is still a vital skill.
A different question, to which your author does not know the answer, is this: Has the ability to trade stocks online for under ten dollars or pounds per trade made us any better as investors? If the answer is no, and that as an individual a private investor does not have the required skills to flourish, might a higher price brokerage that offers research and guidance be more appropriate?
Whilst it is true that low cost dealing and lower minimum transactions have made equity markets more available to private investors with a limited budget, this may not be appropriate. Clearly it has expanded the number of trades being made, which stock exchanges and around the world must be grateful for. But, should an investor with very limited funds be investing in the markets?
Such questions clearly bring into focus the different potential level of services from a stockbroker and which might be appropriate for you. Most brokers offer more than one level of service and can often tailor their offerings to the needs of an investor. In the future, it might pay to ask how else a stockbroker can help you.
To read more articles about investment by Stuart Langridge, please visit: http://www.stockexchangesecrets.com/stockbroker.html
Related Tags: stock broker, stockbroker
Your Article Search Directory : Find in Articles
Recent articles in this category:
- The Secrets to Getting Low Down Payment Car Insurance
Upon purchase of a new car, there is almost always a requirement to buy an auto insurance policy as - The Wisdom Behind Auto Insurance Comparison Quotes
No one in his right mind would not go for a good deal. In fact, everyone is out on their feet and ru - The Benefits of Auto Insurance Comparisons Florida
Insurance can be expensive. This is something everyone knows about especially in the sunny state of - Auto Insurance Florida: The No-Fault Policy
There are different kinds of car insurance offered by a wide range of providers today. Different sta - Finding the Cheapest Auto Insurance Companies
Everyone is asking and searching for the cheapest auto insurance companies available today. Consider - How do You Compare Private Health Insurance Cover in Australia?
Deciding what is the best and most affordable private health insurance cover can be easy if you take - How Payment Protection Insurance Was Mis-Sold
For over six years the issue of Payment Protection Insurance (PPI) and how it was mis-sold to custom - Finding Quotes For Auto Insurance Online
One of the many concerns when you are shopping for auto insurance is being able to get access to quo - How You Can Find the Best Auto Insurance Online
When it comes to renewing your car insurance you are going to quickly discover that there are a numb - Guidelines For Searching For Auto Insurance Online
The internet can be a great source of discounts and values related to auto insurance. However, many
Most viewed articles in this category:
- Trading Forex With Pivot Points
Forex Pivot Point Trading are used today by Forex Traders and are calculated on the previous days mo - Where To Search For Free Grants
Where do you look for free grants? The search must be thorough or it could be an exercise in futilit - The Connection Between High Blood Pressure and Salt
We are a society of Salt Addicts. It cannot be denied. When you look at the things we do and the pla - Tips For Avoiding HYIP Scams
Before knowing about HYIP Scams, refer to the functioning of HYIP or "High Yield Investment Programs - Getting Credit After Bankruptcy
Consumers do not have to live sans credit following a bankruptcy. By following certain steps consume - Tips For Choosing A Credit Card
Are you looking for that perfect credit card? If so, you may be confused about what exactly to look - Cheap Car Insurance For Teens Online
Many elements determine a car insurance policy. Car insurance companies look at the person's age, hi - What Exactly Is Free Grant Money?
You can apply for free grant money from various government agencies. But where exactly does this mon - Small Business Owners Marketing and Customer Service
Marketing can be time-consuming, but it doesn't have to be hugely expensive now, thanks to the Inter - Apply Online For A Credit Card - How To Choose A Card?
The best type of credit card for you will be dependant on how you intend to use the credit card. Are