According to one report, 39 percent of Americans do not have any money invested in the stock market.
If you don’t have any money in the stock market, you might want to hire a stock broker so that you can buy some stocks. That said, you might also be wondering if you actually need a stock broker to get things done.
Below, we’ll take a good look at what stock brokers do and how they can help you. Once you’re finished reading, you’ll know if you need to hire a stock broker or not.
Let’s begin!
How Do Stock Brokers Help?
In simple terms, a stock broker is someone that will help you make good decisions when it comes to buying stocks.
So, suppose you have $1000 to invest, but you don’t know what stocks you should buy.
If you call your stock broker, they will typically ask you what your risk tolerance is. They will then outline a few stocks that will be a good match for your budget and risk tolerance.
They will also help you complete transactions, thereby minimizing the amount of effort it takes to buy a stock.
A stock broker will also let you know when you need to sell a certain stock. As a result, their advice can help you avoid a situation wherein you lose money because you held onto a stock for too long.
At this point, you might be wondering, ‘how do stock brokers make money?’
Well, most stock brokers tend to earn a commission whenever they sell you a stock. Some brokers also charge a monthly/yearly fee in exchange for their services.
There isn’t a standard fee here, and you’ll find that the top stock brokers with a good track record can be much more expensive when compared to others.
Do You Need a Stock Broker?
After reading the above, you might not be sure if you should hire a stock broker.
What you do here generally depends on your goals, and how ‘hands-on’ you want to be.
For example, if you’re willing to do your own research, you might not need to hire a stock broker. However, if you want to keep your workload to a minimum, using a stock broker can be a good idea.
It’s also worth noting that sometimes a stock broker can be helpful, even if you want to be quite hands-on. For instance, if you want to invest in international markets, using international stock brokers is often a good approach.
That’s because these people will have a better understanding of their local market, and so they can help you make better decisions.
What Will You Do?
As you can see, there isn’t really a definitive answer in regards to whether or not you should use stock brokers.
That said, if you’re still on the fence, you could always trial the services of a stock broker for a few months. If you do this, you’ll develop a better understanding of what a stock broker can do and how they can benefit you.
You can then use this experience to decide if it is a good or bad idea to enlist the services of a stock broker.
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