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This is a guest post by Michelle Eld. Read more about her at the end of the post.
Every Monday banks or credit unions release a rate sheet that define the annual percentage rates for all of their products and services.
The interest rates have definitely seen better days and many people worry if they will ever actually be able to retire.
As hope for the future darkens, people then seek out other avenues in order to make their work just a little bit harder.
With the stock market many people are choosing to place their money more at risk in order to gain a higher rate of return. However, many people do not know where to get started.
1. Find the right type of stockbroker
Unfortunately, the average person cannot simply buy and sell stock the same way that someone would buy something at the corner market. In order to buy and sell stock a stock broker needs to be involved. The choice here is find the most appropriate fit for your individual needs; there are two choices full-service stockbroker or a discount brokerage. Full service brokers work with each person to determine the best investment strategies for their individual needs. They also offer a wide range of products and services, but also work on commission.
The second type of stockbroker is a discount brokerage; this is more of a “Do-it-yourself” approach. This type of stockbroker does not provide any investment strategies or general guidance; they mainly take the buy or sell requests and fulfill the orders. You need to complete all of the research as well as make all investment decisions yourself.
2. Complete a background check
Whether you decide that you are in need of a second person’s advice or you are thinking that you are a ‘do-it-yourselfer’, you need to complete a background check on the person or the company that you are working with. If you go with a full-service brokerage then talk to past and current clients in order to determine if the broker gave them sound advice or if a investment fraud attorney needed to become involved. You would need an investment fraud attorney when you believe that the investment suggestions were not in your best interests but in the broker’s best interests.
With a discount brokerage determine if the company is part of the Better Business Bureau or complete several web searches to read forums of other’s experiences with the company. Verify if the company you are using offers live assistance via chat or phone in order to get help, when needed.
With either type of brokerage, determine their history of cases brought against them by an investment fraud attorney and decide your level of risk. Any type of financial decision will come with fine print and the schedule of fees and charges, read these! Knowing what to expect with an account is vital for succeeding financially. If you’re unsure you can always consult a stock attorney just to make sure.
Establish which accounts you are considering opening require a minimum balance. You may find that a full-service investment broker that you would like to work with requires a minimum balance of several hundred thousand dollars and that is not in your budget. Find out upfront what level of investment a brokerage is going to require.
About the Author:
Michelle Eld is a Boston-based freelance writer and editor who got her start in the newspaper business 20 years ago. After working for a time in the consulting business, she quit her job 13 years ago to raise a family and work from home. Today, she maintains a regular client list, producing compelling, creative content on a variety of topics using her knowledge of SEO and other content optimizing approaches.