Choosing An Investment Stock Broker
If you want one.
And I don't recommend any broker with whom to trade who will be giving you advice on what to buy and sell. When a broker speaks it is a eulogy for your money. My definition of a broker is one who makes you broker.
The reason I say this is that when I owned my brokerage company I hired and supervised over 300 brokers. The actual number of good traders I could count on one hand and have fingers left over.
Let's understand that a broker is hired by a brokerage company for one reason - to generate commission, not to make you money. He is trained to analyze stocks or mutual funds, but not to protect your capital. Pitifully, he thinks he is. They never tell you to sell before a stock falls to 50% of its value. Most of the time brokers are left to themselves as to what they recommend to their customers, but there are many brokerage houses that will insist that they push some particular stock of the day or new Initial Public Offering (IPO). Many times he has a quota - and you're "it".
Don't deal with a relative. Do I have to explain this?
If you live in a small town, don't deal with anyone who also lives there. You don't want everyone knowing your business and anyone in that local office can see your account if they want to.
The average broker has 300 accounts and you know those with six and seven figure amounts are the ones he calls. Those people with less then 100K seldom get attention. Understand you are on your own which in most cases is best.
Be careful of any broker who advocates fading the market. I can hear him now, "This stock has gone so low it has to come back". This is a death wish for your money. Bottom pickers end up with smelly fingers.
A broker who calls you and says he has a "system" must be highly suspect. If that system is so good then why is he willing to share it with you? He should be independently wealthy by now. Be suspect of any broker who calls you out of the blue with a "story". I don't care how good it is if you don't know this "Billy Sol". These guys refer to you as mushrooms. I wonder why. Maybe because mushrooms are grown in the dark and fed horse manure.
Never trade commodities with a stockbroker. There is a world of difference in trading stocks and commodities. Stockbrokers don't think fast enough. You shouldn't have someone who is used to driving a kiddie car trying to handle a Formula One.
Make any broker prove what he says. Get references. What you want from a brokerage company is proper execution of your order at a low price, not advice. Your best bet is a discount broker because they are not allowed to give you "advice".
Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.
Copyright 2005
al@mutualfundstrategy.com; 1-888-345-7870
More Resources
Unable to open RSS Feed $XMLfilename with error HTTP ERROR: 404, exitingMore Stocks & Mutual Funds Information:
Related Articles
Mutual Funds are Dead
You may have wondered why your mutual funds have been going down for the past 2 years. The answer is very simple, but not one you will hear from Wall Street as they want you to send money.
How To Make, And Keep, Money Trading Stocks
If you are serious about making and keeping money by trading stocks, then there are three things you need to do, and do well.Money managementOrdersTrading systemMoney managementMoney management comes first.
Box Of Chocolates
Ever have one of those sample boxes of candy? Each little piece is beautifully wrapped in colorful foil or decorated with an interesting design. Taste just one.
Market Globalization
Just 30 years ago the stock market was a shadow of what it is today. There were many fewer shareholders and the daily volume was a fraction of what it is at present.
Buying New Issues
Has your broker been calling you recently with the "great opportunity" to get in on a new Initial Public Offering? With friends like that you don't need any enemies.I don't care how good this new stock offering sounds.
How to Find Value in No Load Mutual Fund Investing
What are you thinking when it comes to your no load mutual fund selections? Are you saving pennies and sacrificing dollars?Are you spending your time looking at expense ratios, analyzing Morningstar ratings and searching for funds with low fees and no 12b1 charges? If you are like most people, you know these things in and out. You've spent hours evaluating them, and your chosen mutual funds cost little to purchase and maintain.
Overvalued & Underbought
With all the bad news that has been dumped upon the economy for some reason the stock market is going up. Why?The SEC (Securities and Exchange Commission) has just set up new guidelines for core earnings.
Ignore Stock Market Talking Heads
You should ignore analysts on TV, the radio, the newspaper and all other TALKING HEADS when it comes to investing! What stocks do they talk about? - The same old group, every day of every year - Why? Because they don't know any better, they are sheep like the general public, repeating what every economic textbook says and every other economist tells them to say. Everyday, the same companies are highlighted on the evening news -WHY?They aren't going anywhere.
Stock Trading Diversification
This is the continuing story of our two imaginary traders, Peter and Paul.Peter is a professional trader, Paul is not.
Quality Investment Information: Standing Firm In the Face of Opposition
THERE'S SOMETHING TO BE SAID FOR standing firm in the face of opposition. Interestingly, most of the best stock decisions have come at times when the mainstream is saying precisely the opposite.
Moving Averages
Every day on CNBC-TV they show a 200-day moving average line superimposed on the stock price history. It seems they give great credence to this manufactured line as it represents 10 months of price action.
Stealth Bull
If you have been watching the stock market at all you are probably very confused. You are not alone.
Trading Education: The Best of Both Worlds!
I made my very first investment in the stock market when I was ten years old. Ever since then I have been hooked! Now I check out hundreds of trades each year with the same excitement andenthusiasm, and each time try to find that one market at the right time that could dramatically create wealth.
Stock Insurance
You have a lock on your house. You have a lock on your car.
No Load Mutual Funds: Investment Hype vs. Investment Help
With the internet such a huge part of our daily lives, many investors have access to a wide range of instant investment information.Whether you're into stocks, bonds, mutual funds, futures or options, there are tons of electronic investment newsletters offering to turn your small stake into a giant fortune.
The Stock Trading Plan - Why You Must Have One To Trade Successfully
This is the continuing story of our two imaginary traders, Peter and Paul.Peter is a professional trader, Paul is not.
Mousetrap
The spring-loaded rat catcher is the ultimate low-tech device invented more than 100 years ago and remains the best demouser in the world. It is so simple anyone can master it and best of all you can keep on using it year in and year out.
Small-Cap Stocks: The Beginning of the Journey
When an individual investor wants to roll up his sleeves and do some research in the pursuit of the next big winner in the stock market, the place many start is in the small cap sector.As with the other capitulation sizes (capitalization is a stock's market value), no one can completely agree on a precise definition, but corporations under $2 billion are often considered small caps.
How to Pay Less and Get More: Discount Broker vs Professional
How do you invest? What do you really pay? At the end of the day, what are your real results? These are questions smart investors should be asking themselves (but usually don't). In this era of more fees, misc.
Analyst Reports
When you become interested in a stock or mutual fund you can call your broker and he will send you reports on how the company is doing, what their management is like and what might be the projected earnings for the company and how the industry is doing. Great information.