Trading Stocks - How & Where to Buy or Sell?
Filed Under Discount/Online Broker, Full Service Broker, Stock Market Basics |
For trading in stocks and to buy say 100 shares of IBM , there are a few basic steps that you as a stock market beginner will have to perform. First of all, I will explain you how many types of Brokers are there and then what types of accounts you can open.
There are two types of broker set up accounts you can choose from namely full service broker and discount/online brokers.
Full Service brokers generally will ask to you meet them in their office or service centres or their investor relationship manager will come to your house and will get all the details from you in terms of how much you earn , to how much liquid mony you have, to howm much risk you can bear. He will be asking all those questions because he wants to know you well and then based on your risk taking ability and the kind of returns you are envisaging from stock market he will give you recommendations of stocks.
This type of service is very personal and the inverstor realtionship manager will deal with on a one on one basis and whenver he thinks there is a good stock available to buy he will advice you acordingly and you may accept or reject his advice to buy or even sell a particular stock. The full service brokers charge commission which is considerably higher than the discount brokers. A lot of people think that this money is well spent and are willing to pay that much to get advice from knowledgable and expert sources.
Discount/Online brokers are those who as the name suggests charge less brokerage or commission and mostly setup online so that there is no human interface when you buy or sell shares. That means that when opening an account in a discount brokerage they do not ask anything about your financial situation but will allow you to trade usually if you have $1000 in the account. These brokerges do not give you advice whatsoever on what to buy or sell and it is up to the individual to make his informed decision for what he wants to buy or sell. For that what sources you can go to I will deal with later and how to read the stock market recommendations is a separate topic in itself.
As a stock market for beginners advice I will suggest open an account with a discount broker and test the waters as it costs less , yes the downside is that you will not get advice and you will be on your own but do not worry there are hundreds of sources online where you can get recommndations.
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