How To Choose A Good Stock Broker?

Have you invested your money on shares of different companies? If yes, then you should now be looking for good brokers that can help you trade. Generally, most of the brokers are affiliated to a brokering firm and are good with buying and selling of stocks in the market. But if you are one of those who think you can manage your investments and trading yourself then here are a few reasons you should know why you need to have a broker.

First and foremost reason is that stock brokers are professionally qualified and know the knack of the trading business. These brokers have to go through two tests and they get their license when they pass. The exams are quite tricky and one should be at least a Bachelors or Masters in the field of business or finance.

 

Individuals planning to invest money in the stock market should understand the differences between a stock market analyst and a broker. A stock market analyst is a person who does a through study of the market and foretells the market’s future and also provides information on a particular stock or company. On the other hand a stock broker is a person who will stick to your decision and will not study the stocks or the market.

 

The main remuneration for these brokers is from the commission they charge for every sale. If you tell your broker to buy or sell a stock, he/she will get a small fraction of the transaction. However, there are a few stock brokers that have a ‘per transaction’ fee.

 

Types of Brokers

As an investor you should be aware that there are two types of brokers – once called the full service brokers and the other called the discount brokers. The basic features provided by the full service brokers are variety investments options, offer investment advice and accepts fees in the form of commissions.

 

On the other hand, discount brokers will not provide you with investment advices and market analysis. They simply will obey your commands – so you ask them to buy a stock they buy it for you and you ask them to sell a stock for a lesser price and there it is done!

 

Here is where the challenge comes when you have to make a decision of which type of brokers you prefer to work with, whether a full service broker or a discount broker. For those who wish to invest in stock trading, we would suggest that they go for full service broker so that they make their investment fruitful.

 

These types of brokers will guide you and help you get used to the trading business. But, for those who have good experience in stock trading they can be associated with discount broker who will just help you do your trading.