Buying Stocks
Buying stocks isn’t difficult these days with the availability of new online trading sites. These companies offer much lower commissions rates than ordinary brokerage houses and give their clients the ability to manage their own accounts. But is that always such a good idea? My name is Felix and I’m a stockbroker. It’s hard to admit that in public. It seems like stockbrokers are currently only second to dentists as the most hated professionals on the planet. And who can blame the public? The recent scandals on Wall Street and in the housing sector have sent most peoples’ portfolios into a deadly tailspin. Because of this a lot of hard-working people will be forced to postpone retirement and work well into their golden years. But that still doesn’t mean buying stocks online is a good idea for the average investor.
Whenever someone asks for my advice, which is rare these days, I always tell them the same thing—start with a broker. Though our good name has been sullied over the past year, a professional broker can still offer you great advice and help you to create a balanced portfolio. Unfortunately, however, this is not the trend. Many people have eschewed the advice of stockbrokers and are buying stocks online. The reason for is twofold: firstly, most people don’t trust stockbrokers anymore, and secondly buying stocks online is much cheaper than purchasing them through a traditional brokerage house.
But there are serious risks everyone must know if they are considering buying stocks online. The truth is that many of the people who are currently buying stocks online do not have the education or experience to create a successful portfolio. In fact, many of them are hoping to get rich quick, which is a risky proposition indeed. These people fail to realize that there are thousands of dedicated professionals looking to take their hard-earned money. Unfortunately, trading online has become little more than gambling these days and many investors have lost their shirts’ buying stocks online.
If a person truly wants to manage his own portfolio, he must educate himself about the stock market. He must know the stocks he is interested in inside and out. He must also dedicate most of his time during the trading day to watching these stocks and seeing how they trade. This is what I tell anyone who asks. I also tell them to be patient and conservative. Buying stocks online is like anything else—you will undoubtedly make a few mistakes along the way, but after a while you will get better. And if you remain patient and don’t gamble, there is a lot of money to be made over time.
