Which type of stock broker should you choose

NASDAQ in Times Square, New York City, USA.

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Have you laughed at the idea of investing in stocks assuming that it’s much too complicated for someone like you? Think again. Learning the ins and outs of investing in the stock market is not as challenging as it might initially appear to you. If you take it one small step at a time, you can easily learn how to invest in the stock market, master the basics of investing, and make some extra money. An important key to succeeding with stock market investing is to find a stock broker who suits your needs and works well on your behalf.

What is a Stock Broker?

Your stock broker is the one who handles the purchasing and selling of your stock market shares. After you’ve selected a stock broker, you’ll open an account. Anytime you buy shares of a company, money will be withdrawn from this account and changed over to company shares. When you sell shares, the opposite happens: shares will be taken from your account and the money is then deposited.

All the details of any buying and selling transactions are handled by your stock broker. You simply let them know how many shares you want to purchase and name your price. This is why it’s so important to have a good stock broker. Although there any many aspects to choosing a good stock broker, the first thing to decide is whether to choose a full service stock broker or a discount stock broker. Here is a brief explanation of each type of stock broker.

Full Service Stock Brokers

Pro: Detailed portfolio advice, personalized services and specific investment recommendations.

Con: High trade commission fees.

A full service stock broker is a good match for you if you have a large amount of capital to invest and plan on making fewer trades.

Discount Stock Brokers

Pro: Low trade commission fees.

Con: Fewer personalized services.

A discount broker is a good match for you if you have a smaller amount of cash on hand and prefer to make more trades.

The Next Step: Choosing a Stock Broker

Now that you understand the difference between a full service stock broker and a discount broker, making the choice between them should be a snap. Your next step now is to choose the specific stock broker with whom you want to work. Ask friends and family for recommendations or compare several online brokers. A good stock broker will have a solid reputation, a transparent fee schedule, and a responsive customer service.

Make sure that you are comfortable with your stock broker before initializing any trades. When you open an account with the stock broker you’ve selected, you’ll first need to deposit cash into your account and fill out some forms. Within a few days, your account should be up and running and you’ll be ready to start trading. It’s as simple as that!

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