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Be a Stock Broker

Beat the bankers - be a stockbroker in your spare time

As the economy continues along its perilous path, it’s never been more important to take responsibility for managing your money and invest for the future. If the pitiful return dripping from your savings accounts makes you want to weep, perhaps it’s time to dabble in the stock market.

Buying and selling shares, or share dealing has never been easier, thanks to affordable Internet dealing and the ability to build and track a portfolio online. In the past, it would have been inconceivable to buy stocks without a stockbroker. With endless information now available online and state-of-the-art technology to assist in the assessment of stocks, more people are learning about the money markets and how to make accurate projections, without the need for brokers.

Firstly, set your investment goals and decide whether you want to generate income or capital growth. Shares that pay a good dividend tend to generate income, whereas fast-growing companies could create capital. By shrewdly speculating on changes in the value of company shares, you may find that you can turn over a tidy sum, but be aware that if the market misbehaves, you risk losing the money you have invested. How comfortable are you taking risks? If you shy away from uncertainty, the stock market may not suit you. Higher risk shares often bring higher returns and lower risk shares lower returns. Aim for a diverse portfolio that offers a balance of both.

Do plenty of research to minimise the risk of treacherous trades. A savvy investor can rely on knowledge and instinct to make sound investment decisions. You can bypass many of the charges that are associated with using a broker as an agent for the trades. There are still some fees involved with interacting with the market, but savings can be considerable, especially if you trade regularly. Many brokerages demand high minimum balances from investors, but if you manage your own activity and are starting with just a small amount, you can make a few investments, building a portfolio and the confidence to make more trades.

Brokers can offer experience and knowledge that can help even veteran investors, providing, for instance, information on current events that may influence the performance of stocks. However, for investors who have the time to keep a close eye on the marketplace and feel confident assessing the market and projecting performance, buying stocks without a stockbroker can make good financial sense.

It is straightforward to get the ball rolling and open an online trading account. There will be options to trade in equities on international stock exchanges, in addition to bonds and gilts, investment trusts, unit trusts and OEICs and Exchange Traded Funds. To make a trade, simply log in to your account or pick up the phone, whereupon funds will be debited from or credited to your bank account. You will be charged a flat fee per trade and the more trades you undertake, the lower your fees will be.

Do your homework, prepare to invest for the medium to long term and anticipate that your investments will fluctuate and you may just be quids in.

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