How To Choose Your First Broker
Most people don’t think about investing their money in the stock market unless they’re in big business, but the truth is that everyone could do it – with the right help.
You can get the right help from online articles, but it can get a little confusing with all the information out there. To be able to start investing, you need to have an investment account.
Selecting someone to work with you as your Forex broker requires you to think carefully. It’s not very different from choosing which stock to put your money into, and you need to choose the right person because not all brokers are for all investors.
Before you can even choose a broker, you have to learn about what they do and what constitutes as a broker in the first place. There are two types of broker out there and not all of them are the same. Some deal directly with their clients, whereas others go between a larger broker and a client.
The latter isn’t considered as reputable as those who deal directly with their clients, so it’s worth doing your research before you make any bold decisions.
You can choose between full-service brokers and discount brokers, and there are differences.
- Full-Service: These offer more services to an investor, but the fees aren’t cheap. They do, however, give you one-to-one advice that is more personal and specific research for what you want from them.
- Discount: Discount brokers give people the option to solicit a broker for advice, but you will pay a lot more in fees after consultation and executing a trade than you would with an online trade.
The best option for younger investors is usually a discount broker, as a full-service broker is just not as financially feasible for someone new to the investment game.
The way that you choose your broker will depend on the type of investor you are. As mentioned earlier, not every broker is going to be for every investor, and once you understand this it makes it so much easier to decide the type of investor you are. So, what type of investor are you?
- The Trader. If you’re interested in quick gains and not holding onto the stock for long, then you’re a trader. Numerous trades over a short span of time show you like to move quickly, so you’ll want a broker with low fees.
- The Buy-And-Holder. This makes you more of a passive investor, holding onto stocks for some time before selling. They’re interested in their position and the value of the said position. You want a broker without monthly fees, as you won’t need their services all the time.
If the investment is what you are interested in, then you need to think about how you want to organize your broker before you get started.
Your first broker may not be the person you use for the rest of your life, but they still will have an impact for a while, so choose wisely!
What tips can you share about finding your first broker?
