Trading in stocks can be a lucrative investment when done right and with the appropriate tool, and by tool, we mean the stock brokers. A stock broker is a registered professional who executes buy and sell orders for stocks and other securities on behalf of clients.
It is important that, whether as a new or experienced trader, you choose the right stock broker that best suits your needs in order to maximise gains and minimise losses.
We have have made a list of helpful tips to follow when making the important decision of choosing your broker.
1. Are they registered
Make sure that the Stockbroker is registered with the Securities and Exchange Commission (SEC), and listed as an accredited stockbroker.
2. Understand your needs
Choosing a broker will be a lot easier if you know your goals and needs. It is important to be on the same page as your broker to get the most out of your investments. Know if you are you a conservative or aggressive investor. Your broker should take the time to research the type of investments that will meet your needs and understand the type of investor you are.
3. Know their fees
Inquire about fees, find out in advance all additional fees and charges you will be expected to pay, especially if you are a new investor. Match your investment style with a brokerage firm that charges the least amount of money for the services you’re likely to use most frequently. Steer away from brokers who charge ridiculous fees that do not make make economic sense.
Look for a broker who is easily accessible and, if he or she is not reachable, then find out who covers for them. On busy trading days, can you reach this broker? This can be very significant.
5. Check reviews
Check for customer reviews, look for information on the broker’s background and strategy. Find out about their experience, training and certifications.
It is important to ask the stockbroker what sort of insurance coverage they provide you, including anti-fraud guarantees. Also, ask them how your information is being protected online.
7. Take your time
Do not make a rushed decision, as choosing the wrong broker might result in lasting negative impacts on your finance. As a new investor, you need to take your time and make the right decision, that suits your goals, strategies and pocket.