When you invest in stocks to earn profits for the future, you are using up your hard earned money. To avoid investing in the wrong stocks and losing your money, you need to find the right professional broker. You need one that you feel comfortable with and trusted with. You also want them to give you specific guidance on which stocks to invest in, and to be able to keep the economic scenario in mind. Finding the right broker can be a difficult task as there are so many online and offline brokers to choose from.
One of the first things you need to decide is whether you need a Discount Broker or a Full Service Broker.
• Discount broker – they don't advise or guide you, but only invest in stocks you tell them to invest in. You will be the one who decides on the investment strategy. Their fees are lower because they do not give any financial advice.
• Full Service Broker – they will guide you on the type of investments you should make and the stocks you should invest in, based on the financial goals you set. They offer a wider variety of financial products, which include annuities, bonds, stocks, insurance and derivatives. They also charge a high fee for their expert knowledge.
When choosing an online broker, it is important that you check the quality of customer service that the brokerage company provides. One example is that if you cannot access your computer, you can still get your account information over the phone. You should also ask if the website is slow, could you call and speak to a stock broker personally. Be sure to do your research before choosing an online broker.
Some brokers will require you to make a minimum deposit to open a stock account, which means the more money you have to invest, the more options you will have to hire a broker. Before choosing a stockbroker, ask if there are any financial requirements that need to be met. Check to see if the brokerage firm is a member of the National Association of Investment Dealers (NASD), because if they are, it means they will be fair in their transactions. You should also check to see if they are members of the Securities Investor Protection Corporation (SIPC). This membership will protect your assets in a brokerage account up to five hundred thousand dollars. This covers even if the brokerage company goes bankrupt. If you have chosen a full-service broker, make sure that they don't unnecessarily recommend that you trade every once in a while as they earn a bonus every time you trade.