Stock Brokers Should Match Your Investing Style

Before you start looking for stock brokers, you need to examine first the amount you can afford to invest, the kind of investment you prefer, the frequency of trading you like and the level of trading assistance you need.

According to many stockbrokers, there are about five types of stock investors: the small investor, the mutual fund investor, the active trader, the need-help-always investor, the big-time investor and the private-banking investor.

It is crucial that you know which type of stock investor you are so you know which type of stockbroker or brokerage to choose. There might be brokers that are well recommended by the media and other investors, but when you start to ask them for investment help, they do not seem to be as enthusiastic as you would expect from a person looking for clients.

Either these stock brokers think your investment money is too low for them or your investment personality spooks them.

If you are just starting out in stocks and you only have $5,000 or less to invest, you might have a hard time finding a stockbroker to manage your stock investments because stockbrokers would immediately think of their rates of return in terms of their time and effort invested in you.

However, there are now a lot of online stock brokers that accept very low minimum amounts such as E*Trade which requires at least $1,000 and Ameritrade which requires at least $2,000.

The country’s largest discount brokers, Fidelity and Charles Schwab, require minimum investments and balances of $30,000 and $50,000 respectively.

Remember also that these online brokers require minimum trades and balances within a certain period of time so you would not be charged for broker fees. So before you choose a broker, ask all the possible fees you may be asked to pay. You may be surprised to discover after a time that your investment money was already exhausted by fees.

If you are the type who want to invest in stocks but do not have the time to frequently monitor your stocks every day, it may be best for you to invest in mutual funds or in stocks that do not change much from day to day.

Again, before you invest in the mutual funds or stocks managed by stock brokers, ask them about all the possible fees that you may be required to pay. Better yet, research reputable online stock brokers, you may be able to find information that could work for you.