dealing with stock brokers you might benefit by keeping
the following things in mind:
The first step is to decide whether you need a Discount
broker or a Full Service broker. A discount broker
charges a commission on every transaction whereas
Full Service broker provides investment assistance
for a fee.
Get a broker who is easily accessible. Sometimes
it might be detrimental to have a broker who has
a truckload of clients as
you may not be able to contact him in peak trading
A word of mouth from your neighbors may not be enough
to convince you about a certain broker. Find out
more about him before engaging his services.
Make sure that the stockbroker you choose is able
to get undervalued IPO stock and high earning notes
which he can equally distribute.
Always make sure that the broker you are using doesn’t
have too many high profile clients. It is more than
likely that he will tend to give them preference
At the same time check your broker’s background
and licenses. You don’t want to fall into
the trap of another Ketan Parekh, do you?
Sometimes it is better to go for a broker who charges
an annual fee rather than per transaction charges.
This way you are sure to avoid a broker who might
make unnecessary deals just to raise his commission
If your broker advises you about certain shares
treat it as advice and not as a final word. Study
the shares yourself, before committing to action.
If you are just finding your feet in the stock market
first invest in companies which are on the uptrend.
This way you won’t have a huge profit margin
but at least you don’t start in the negative
the same note, use the profits from your early transactions
to start investing in the slightly risky shares.