Choosing The Right Stockbroker

For the most part, choosing the right stockbroker can be rather confusing even though they all seem to charge the same commission rates these days. Being able to discern which stockbroker depends on the type of investor that you are.

Investor Type #1: Casual

If your investment capital is about $ 200 K or less, then your choice will be a discount broker as most of your money will be in ETFs or index funds. What this is also means is that you will not trade that frequently, and not much advice will be required from your broker due to the fact that you are investing in safe and standard investments. TD Ameritrade is one such broker that you can employ the services of.

Investor Type #2: Frequent

If you are a frequent trader, then there is one thumb of rule that you must watch out for, and that is to watch out for the fees that a broker can charge, as this can easily reduce your profits. And this is why one should look for a discount broker such as E-trade and Interactive Brokers who offer discounts for those who trade frequently.

Investor Type #3: Short seller

If you sell short, then you have to ensure that your broker has access to these shares in order to do so. You must remember that many brokers will be able to short mid and large caps but not the small ones. Interactive Brokers are an excellent option for short sellers.

Investor Type #4: High Net Worth

This section is for those who have about 1 million plus in the market, and what you should look for is the discount that is offered by how much you pay per trade. Fidelity is one of the best firms to employ if you belong to this category.