Buying and selling stocks can be a lucrative business. You can get great financial success in this industry with a great strategy. However, the market is full of different investments.
Thus, this can be confusing for a beginner.
If you are a new investor and you have no experience in stocks then you probably need someone to point you in the right direction – a stockbroker. Stockbrokers are, very simply explained, professionals who execute buy and sell orders on behalf of their clients. They do not make investments on your behalf, they are simply a “tool” that implements your investment decisions. Another thing to understand is that stockbrokers are not investment analysts. They do not do any sort of analysis, they simply execute orders and that is it. You can think of them as soldiers on a battlefield.
With all this said, it is easy to make a wrong move and end up with huge losses. It’s why many people work with a stockbroker. This professional has experience in the stock market and knows the right moves to make. Therefore, you can expect better returns when working with the right brokerage company https://www.iocbc.com/.
Learn from this guide why you need to hire a stockbroker.
When Don’t You Need a Stockbroker?
It’s easier to understand the benefits of hiring a stockbroker by looking at the situations where you don’t need to have a brokerage account.
Investors must have a way of accessing the investments to achieve financial success. The first way is putting some money in a bank account. Usually, it’s a checking account, but it has little or even no interest terms.
However, you can use savings accounts to give you some returns. But you will not get much interest when investing using a bank account. Plus, banks don’t offer investments that give you stock market exposure.
In that case, you can consider investing through multiple funds. The process involves several investors combining their savings into one investment vehicle and appointing a manager to oversee the investments.
Mutual funds investors can choose to invest using index funds, which have low costs but less potential to outperform the index they track. Therefore, they don’t give that huge returns. Or they can also use actively managed funds for investments, where they hire expert investors to find the best investments.
The only problem is these professionals are expensive, meaning that you will use more money than when investing with index funds. However, they often offer larger returns if successful, but this is not always the case.
The last option is to use a stockbroker who invests in your assets separately. The services are similar to active mutual funds, only that your money isn’t invested with other investors’ money. The broker creates a portfolio suitable for your specific needs.
The only drawback with this is that it is expensive. Therefore, you’ll require a huge amount of money before a stockbroker accepts to work with you.
Why Hiring a Stock Broker is the Best Option?
• Having your brokerage account with a stockbroker offers various advantages, including:
You can buy and sell all available stock that your broker can access. Although we use online brokerages more and more, there are certain stocks that only stockbrokers can access and that is a huge advantage.
You can access foreign stock exchanges with ease. Therefore, you can invest internationally and choose the stock and risk management processes for yourself. This is another cool thing that is primarily a stockbroker advantage. Foreign markets tend to be either closed or unavailable to all regions when you are up and willing to trade, which is where your stock broker comes in handy.
• Many stockbrokers offer other investments like bonds, mutual funds, bank account products, etc. As such, you can get everything you need from a single solution and manage your finances easily. This is better compared to having several accounts with different institutions.
• Stockbrokers can help clients understand the investments they want to try. They have various research resource tools that can help you compare different options and choose the best ones for you. Unlike online brokerages, stockbrokers although will not analyse things for you, will try to at least compare some things and help you understand why are you doing what are you doing. Automated online brokerages tend to just do what you order them and that is it. You can hardly know what is going on and there is an information deficit.
• Stockbrokers offer financial advice beyond investing. They have excellent customer service. Thus, clients can get resources in specific areas. For instance, you can access budgeting tools, loan calculators, etc. which are all great things for both experienced traders and those that are just starting. All of this and more will be available as soon as you find yourself a good stockbroker.
Stockbrokers can help you achieve your financial goals. Going with a good and verified stockbroker is a really smart thing especially because you are putting all or a hefty chunk of your financial security into the hands of someone else. Make sure that they are professional and that they have enough experience. Check that they offer several impressive features and charge low fees for account expenses. Finding a good broker is really important but finding one that is both good and has lower fees is a bit more difficult, but certainly not impossible.
Note that using the wrong broker can bring you huge losses. Therefore, take your time, research, and find the best stock broker for your needs.
As the last thing, we need to inform you that trading is high risk and high reward deals.
You probably knew this but it wasn’t wrong to mention this to you once again. Trading, if done correctly can bring you a lot of money very fast or it can cost you everything. There were a lot of traders who once rode a high horse and with one or two mistakes ended up broke. The trading market is unsafe and volatile on occasions and even the best stock brokers and traders tend to fall into some of its traps. Be careful and always understand the risk that is attached to this type of financial activity.