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Why You Need a
Broker
Based on the type of investment that you are interested in, you
might need the services of an investment broker. These
professionals work for investment brokerage organizations and
possess the required talent and expertise to buy and sell stocks
at the stock exchange. There is no doubt whatsoever that you need
the services of an investment broker, if you wish to buy and sell
stocks at the stock exchange.
While most stock brokers have a background in business or finance
and hold a Bachelors’ or Masters’ Degree, they also have to pass
two different and tough examinations before they are allotted the
license to become a broker.
There is a lot of difference between a stock broker and a stock
market analyst. While the stock broker merely follows your
instructions on whether to buy or sell stocks, the job of a stock
market analyst is to analyze and predict the market behavior, the
future trends of stocks, how specific stocks are expected to
perform in the current environment, etc.
The source of income of a stock broker is from commissions from
the sales value of stocks he has bought or sold. They earn a small
percentage of the value of the entire transaction. There are
broker also who change a flat fee per transaction, called the ‘per
transaction’ fee.
There are essentially two types of stock brokers: the full service
brokers and the discounted brokers, performing two individual sets
of function. While the full service broker deals with many
varieties of investments and is even equipped with various
investment advices, he earns his commission through transactions.
The discount stock brokers on the other hand are not equipped to
give you any form of investment advice and they do not even study
market trends and behavior; they simply do what you ask them to
do.
So once you have decided to seek the help of a stock broker one of
the biggest decisions you have to take is whether to choose a
discount stock broker or a full service broker. If you are a
novice in the field of stock broking, it is a better idea to go
with a full service broker as he can ably guide and assist you in
your investment choices. They are skilled in their profession and
at this stage and you need all the professional help and guidance
you can get. Once you gather the requisite experience in this
profession and know the pitfalls of every step your self and can
make informed decisions yourself, you can then take the help of a
discount broker for doing the necessary trading of stocks for you.
Article Source:
http://www.imargin.com |
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