Do You Need One?

Is it really necessary to have a stock broker in order for you to be able to trade in the Stock Market? The obvious answer is YES. No ordinary individual can expect to walk inside a particular Stock Exchange and be allowed to start trading in securities without the proper clearance. It doesn’t work that way. A stock broker is a licensed professional who specializes in the execution of securities trading and is knowledgeable enough to give expert advice to the client.

During the early years of the Stock Market, the average person didn’t know much about stocks and bonds and the complexities of trading. Full service brokers were always employed in order for the investor to be able to buy and sell stocks, as well as get good advice on what moves to make. That was before the Information Age.

Today, discount brokers and Internet brokers are available to the investor. Moreover, today’s individual is more well-versed in the ins and outs of the Stock Market, with basic introductory courses being taught in most colleges. Discount brokers and online brokers allow you to make your own choices minus the personal expert advice and have your trades executed with but a click of a mouse button.

So the real question that should be asked is, “What kind of stock broker do you need?”.

Obviously, even online trading goes through an online broker who charges you for their services so that doesn’t really eliminate the need for a stock broker. Perhaps the best way to answer this is by examining one’s self and identifying one’s qualification for trading.

If you’re relatively new to the Stock Market, then it would be foolhardy not to seek a full-service broker. These stock brokers may cost you a lot more than what discount brokers and online brokers would charge, but at least you’re not diving head first in uncharted waters. Beginners need experts to guide them, and this is also applicable in the world of stock trading.

If you’re an experienced investor and you’re particularly confident in your knowledge and skills when it comes to trading, then discount brokers and online brokers are the way to go. These stock brokers allow you to make your own decisions and they will execute your orders without question or advice. They are generally cheaper in cost because these type of brokerages eliminate the human presence that full service brokers employ.

Regardless of your level of expertise, you will always need a stock broker in order to join the Stock Market. It’s just a question of knowing which one works best for you.