Do I need a full time broker?
No, you do not. If you think that you are knowledgeable enough to trade stocks yourself, having an online broker will save you plenty of time and money. It is simply much more convenient to use an online broker. Simply visit a site, join, put some money into your account, and start trading right away. Click here to read tips for selecting a broker.
How can I chose the best broker for my needs?
Usually depending on the amount of money that you plan to invest and number of trades that you will execute each month, you can decide which one is right for you. For example if you don't have a lot of money to invest go with the one with no margin limit, however this one will have higher fees. If you have a lot of money to invest go with the ones with smaller fees. I have came upon online brokers that let you trade for only $5, however you have to have at least $100,000 in your account. Check Comparison Table for more information.
Do all brokers sell the same stocks?
No, some brokers offer a more limited selection of stocks. In return they are generally able to give discounted rates because they specialize in bulk purchase of those stocks.
Why do you recommend using a discount broker?
Beginning investors often don't have the funding to justify having a full service broker, it just doesn't make sense. If you have two thousand dollars to invest and you go with a full service broker, their monthly fee would eat up your investment faster than it can grow. On the other hand, if you are actively depositing even low amounts of money into your discount brokerage account and buying stocks on a somewhat regular basis, there will be very little, if any charge. More of your money is available to work for you.
Another factor is that with doing your own research you will become totally familiar with where your money is, and no one will keep a better eye on your money than you.
What fees do I need to be aware of and how does that affect my choice of broker?
There are myriad fees involved in investing. Prices on buying and selling stock, fund withdrawal, and consultation fees are just some of the things you need to be aware of. There are too many factors to list. You need to read your agreement thoroughly before signing a contract with any firm.
Fees for different transactions will impact one person differently than the next. If you are a 'buy and hold' trader, you are less concerned about stock purchase and selling fees and maybe more concerned with monthly or maintenance fees. On the other hand, if you are trading (buying and selling) on a daily basis, the cost of that would be of huge concern. Most brokers' monthly fees are lowered or eliminated if you have a certain amount of transactions per month. Conversely, if you don't do much trading, you may see that monthly fee as a large part of your cost of doing business.