USA Today's "Money" section covers stocks and virtually always recommends a "buy." At a rate of two per day, they could recommend the entire New York Stock Exchange within three years. The recommendations of friends and acquaintances should, obviously, be acted upon with care. Stockbrokers and other professionals in the business may be good sources of information but should not be considered infallible, nor do they possess special "inside information." Stockbrokers are paid for generating trading activity, not for picking stocks, so don't be afraid to ask questions before setting up an account.
- "How many other accounts do you handle?" Too many, and you may get lost in the shuffle, especially if you are one of the smaller accounts.
- "How long have you been a stockbroker?" Often, new accounts are given to new stockbrokers. Try to meet an established stockbroker.
- "May I speak to some of your other clients?" This is perhaps the best thing to do. It's the only way to get a reasonably reliable feel for this person's ability to give you good advice. If he won't refer you to any of his other clients, find a different broker. Consider whether you should be using a broker at all. If you don't feel confident in your stock selections without advice from a broker, you may be better off investing in mutual funds.
Deep Discount/ Online
Salomon Smith Barney
Quick & Reilly
Before selecting any brokerage house, it's important to shop around. You need to decide the level of support and services you want, then find the firm that best meets your needs at the lowest cost. By contacting any of the above firms, you can receive information regarding all of their accounts and services offered. Because of the extreme competitiveness in the brokerage industry, coupled with advances in technology, the costs associated with trading stocks have been reduced substantially. Many of the deep discount firms can execute trades of one thousand shares or less for under $20.
Next: Finding a Broker