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The Need of Stock Market Broker

The type of investment that almost always requires the assistance of a broker is the one that includes the purchase of stocks. Since the latter represents one of the most beneficial investments nowadays, gaining their popularity for more than 100 years, they do represent a more attractive investment than even bonds, gold, real estate and many others.

The first step that you should take before embarking on what whatsoever actions is to set your expectations and financial goals. Only after this you can start entering the first ticker symbol in your investment portfolio or tracking the Dow. You will also have to follow the cash flow of the chosen company.

How to decide whether the stock market is the right investment point for you? If you have money that you will not need for the next five years and longer, then it is recommendable to purchase stocks. In case you foresee that this money will be needed for an earlier use, such as paying the tuition fee of your children or buying a car, then you should consider putting them in short-term savings investments. These may include savings accounts, certificates of deposits (CDs) or money market funds. You should also pay back the accumulated debt on your credit card, since the interest rate that you are charged deprive you of additional resources to invest.

However, the stock market represents the best parking place for long-term investments, since it has proven throughout the history its profitability in terms of high returns. For instance, for the last ten years as measured by the S&P 500, 19% in terms of dividends have been received by the investors of the stock market. Nevertheless, what goes up should someday go down. So, before you start putting your money on the stock market you should take in mind that this trend of increase may not continue forever.

In order to facilitate your investment decisions, you should open a discount brokerage account. This should be done especially in cases of bull markets, bear markets, elections, recessions, depressions, or other delicate long term market conditions.

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