Before you can begin stock investing, you need to make sure that you have a good broker to help you. In the stock market today, there are thousands of companies, and it very difficult to know which stock picks will perform well. When looking for a broker, you should consider what kind of investing you will be doing. Will you be investing for the long term or short term? How much capital do you have available? Which markets will you be investing in? These are questions you need to ask yourself before you start searching around for a broker.
Some brokers will charge you what known as an inactivity fee if you are not trading or buying stock regularly. This could affect you if you are buying stocks on a long term. If you are trading stocks over a short period of time, then you should see if they offer on any discount on commissions. Some brokerage firms will have a minimum account opening balance. Make sure that you have the required amount to open the account and maintain it. If you go below their minimum account balance, you may be charged a fee for that.
If you are looking to invest in different markets, you need ask your broker if their Electronic Communication Network (ECN) is able to provide you with access to quote on other systems. This is important because you may find that you are unable to buy or sell stocks with other investors on a different system. Another point to consider for stock investing is how reliable their ECN is. Delays or downtime on a system could be costly and lose you money or opportunities. It is important to know if they execute the order or route it elsewhere.
There are two kinds of brokers you can choose from, a full service broker or discount broker. If you choose a full service broker, you will be able to communicate one on one with them. They will provide you with advice on stock picking, provide you with reports on your portfolio, and provide technical analysis and fundamental analysis of companies for you. Other services they offer may be option trading futures and currency trading. All these services will come at a cost of a higher commission. Alternatively, you could choose a discount broker who will only execute your order. They will not provide any advice on stock investing or help you with your portfolio. Because of this, they will have a much lower commissions.