6 Reasons Why You Need a Broker to Manage Stock Investment

6 Reasons Why You Need a Broker to Manage Stock Investment

Everybody doesn’t do number crunching for fun. People are well-versed today than they were ever before, but that does not mean we have eliminated the need for professional services in our lives. The online access to investment information, market updates and statistics, and real-time news is easily available to an individual investor but what if you have the money but no basic know-how of stock trading?

You may be good at using online financial calculators and following the stock market, but you may still need a broker to manage your stock investment — he’s a gateway to your financial wealth. You don’t agree? Read on to find out if we make a good argument.

     1. Updated Knowledge

Just as a teacher is well-versed with question patterns and answering tips, a broker would have the latest knowledge of the market to help you make better profits. This is the person who has the authority to trade on stocks according to your specifications.

Brokers are armed with their seasoned arsenal of trade secrets, inside knowledge, and analytics that make them a better candidate at playing the stock market. In fact, with online brokers, they let you know of the right time to buy or sell right away, gaining the upper hand (and valuable profits) by virtue of mere seconds.

A broker is also the right person for sound financial advice; when to sell or buy, and which stock is the best to go for at this time– a broker can advise on all of this and more.

     2. Security of Investments 

A broker provides you with the tool of stop-loss that allows you to place a limit on your trade capacity. This way, you don’t just save on money, you are also able to make the best decision on selling or buying at the optimum time for a particular stock. Your money is also safe with the broker — ready for trade, any time of the day, along with his availability.

There are numerous choices for investors to pick from when it comes to the market. Brokers and financial advisors have their due research on different stock investment options that meet an ideal criterion, which an individual investor will do well to benefit from.

     3. Logic Over Emotion

Managing your money on your own has the added headache of constantly being accountable to yourself over your decisions. A single big loss may hurt more than several wins coupled together or it may put you in a position where you grow careless with your decision-making. A broker ensures that emotions do not come into play with your finances.

It is also quite easy to be swept away by selective memory; humans are prone to remember some transactions over others. We tend to wrongly estimate the value of our good and bad financial decisions and be unable to track the actual performance of our investment portfolio. A broker will be able to keep your biases in check.

     4. Beware of Your Limitations

It will help the most to be brutally honest with yourself; how much of the market are you actually aware of well enough to be able to play it on your own? Will small, calculated profits over long time periods be enough? You may be able to act as your own advisor in certain aspects of stock handling, but the need may arise for a money manager to handle investments on your behalf.

Until your abilities and financial acumen grow, you will have to rely on a worthy broker. Regardless of your knowledge of finance, highly trained, particularly clever and skilled investment professionals dominate the market and it is nigh impossible to compete with them.

It is important to make sure that we follow after their wise decisions (before making our own), just as Burger King did with McDonald’s research and development. Also, time is indeed money. Every moment wasted for the setting up of that brokerage account, is the loss of valuable profits that may have been earned through a broker.

     5. Resources

Through a broker, you have access to any stock in the market that your broker has access to, including nearly every company on the New York Stock Exchange or Nasdaq Stock Market. You can actually consult with your broker for other kinds of investments as well, including mutual funds, bonds, or even binary options.

6 Reasons Why You Need a Broker to Manage Stock Investment

Brokers will often go the extra mile to increase their brand value by offering a broader range of financial services. Brokerage companies also try to distinguish themselves from others by allowing access to valuable tools like mortgage calculators, budgeting tools and estate planning services.

Otherwise, peddled as valuable cost-incurring services, it is an attractive offer to be able to take advantage of a host of valuable services in one place.

     6. Negotiations and Privacy

Brokers are accomplished negotiators. If you wish to sell certain stocks or you realize that your business can do better with a different set of owners, your broker is the person with the valuable set of connections and skills to be able to determine a reasonable market value after analysis.

6 Reasons Why You Need a Broker to Manage Stock Investment

They are familiar with pre-qualified buyers for your commodity. They are also acutely aware of how such deals are to take place and ensure your privacy. Studies show that individual investments do not have an encouraging track record: the unmanaged S&P 500 Index earned an average of 7.81% annually while the average equity investor earned 3.49%.

While it is true that the ideal broker may not come easy, it is worth the effort to invest in one to manage your stock. The ideal broker does not charge highly for stock trade commissions and other expenses, but they lay all their cards on the table when it comes to financial and investment advice and sharing insights. They also allow you to open various accounts with them including tax-favored retirement accounts like the IRA. Decide what you are specifically looking to get out of your relationship with your broker and then choose the best available option for yourself.


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