I’m picking machine stock! I read the annual report of a company, read the balance sheets and income statements and other financial statements, read the Wall Street Journal from cover to cover every day, and watch Bloomberg TV, one of the best financial news stations on the planet, in my spare time. Heck, I’m also listening to quarterly financial calls made with their investment bankers by companies!
Then, when I lined up all my information, and I know that I made a great decision to pick a new stock, I go out and buy it! Usually some time goes by and then …. stock begins to drop.
Every time it happens … The fact is, I’m really bad about this for all my efforts! And at one of America’s best private colleges I studied finance and economics! I have special training in this area! But I still stink at it, it doesn’t matter!
So what should I do, and what should you do if your investment decisions go badly like me? A full – service stockbroker may be the only option for you. These people are paid to advise you to help you select the stocks that will deliver the best overtime.
Many people don’t understand what a full – service brokerage company can do for them, so I thought I was going to write a short article to describe some of the things you could expect from them.
You should expect advice first of all. They will be full of investment ideas and will be tailored to your particular style and investment needs if those ideas are any good. They can even give you advice as an accountant to create financial plans.
Second, they can give lots of research to your research. Every year, the largest brokerage firms spend millions of dollars on in – house research they will put at your disposal. These are great if you want to stay up – to – date about the businesses you are investing in or the specific industries they are working in.
Third, in addition to stocks, they will offer you other investment products. This could include municipal bonds, tax shelters, zero coupon bonds, mutual funds, investment in real estate, and even some insurance such as annuities and the like. Some firms will even provide you with things like free checking and money market accounts, and most firms will allow you to borrow money from your investment account (called margin trading).
There’s one big thing to keep in mind before choosing any full – service stock brokerage company, and that’s this … All stockbrokers make money if you buy or sell a stock or not. The more stock you sell and buy, the more commissions you make. This means they have a stake in getting you to buy and sell as much stock as possible that may not be the best investment strategy for you. For choosing any stockbroker, be sure to keep this in mind.