Any investor who wishes to make use of an online stock broker – whether to take advantage of the decrease in fees, or to manage their own research – needs to be prepared for a significant difference from the world of traditional or discount brokers. First and foremost, stock investors must be prepared to manage their investments according to their own research, and they must be comfortable without a friendly voice at the other end of a telephone line. For all of their benefits, one area that stock brokers may be lacking is customer service!
The choice to select a broker for your investment portfolio makes a world of sense, and this is true whether you are dealing with a few thousand dollars… or even several millions of dollars. Some people may look down their noses at online brokerages because they charge a lesser fee for their services, and they don’t tend to be interested in chit-chat when taking orders on the phone or in person. This is not a bad thing, it’s simply business. It takes about the same amount of time for the brokerage to manage some stocks for any client, no matter how large or small the sum may be.
Those making use of a broker will usually have a wealth of information at their disposal, however. With online brokers there is often a glut of 24-hour information available for comparison and research, and investors can take full advantage of this to decide on their stock market strategies. With these tools ready and waiting, a savvy investor who understands this information and can apply it well will likely feel much more comfortable in dealing with an online broker. These investors know what they are looking for, how to accomplish their goals, and really need very little in the way of coaching or outside advice. However, newer (or less confident) investors who do not fully grasp all of the analysis at their fingertips might be more at ease with a traditional broker while learning the ropes a bit, and could later make the jump to an online broker.
The best advice for working with an online broker, then, is to learn the things you need to be successful as a stock investor. Once that knowledge has been gained, however short or long the time that it takes, then the future interaction with an online broker will be both streamlined and comfortable.
It can be tempting for individuals to consider moving away from an online broker as their net worth begins to grow, just because money managers seem to have a special cache for the wealthy. However, investors should ask themselves if this move “up the ladder” is always the best choice? It is not hard for people to become a bit “pound foolish”, as the British say, once they have more money to be managed. For many people, they can manage their sizeable accounts every bit as easily online as they did when they were just starting out. In fact, it may be even more satisfying.
Once an investor has learned how to research the stock market well, and has seen success with his or her efforts, is that really the time to start asking someone else how to do things? Sticking with an online broker – for the right reasons – can make all the sense in the world… even once the investments have really started to improve one’s quality of life!