Choosing Your Stock Broker
If you’re planning to buy stocks at the Stock Exchange, you need to have a stock broker, since only members of the exchange can make a transaction. Brokers act as mediators between the buyer and seller, and they earn from the commission made from the sales or from a percentage of a transaction. But before stockbrokers can acquire their license, they have to pass a series of difficult exams that are different depending on their country.
It is also important that you know how to differentiate brokers from market analysts. Market analyst make researches on the different factors of the stock market, and then make predictions on the performance of a specific company share. Brokers on the other hand, do not focus on analyzing the market, they mainly follow instructions to buy or sell a share.
There are two types of brokers, which you can choose from. The first type is the Full Service Broker who offers more types of investments, advises you on what to buy or sell; and he gets paid on commissions. Then the second type of brokers is the Discount Broker who only buys or sells shares according to your decision.
So, if you are new to the stock market, full service brokers would be an advantage to you since full service brokers will advise you on which is the best possible investment. Also, their advice will help you in deciding what or when to trade a stock.