Lately we have received many requests for help in choosing the right stock broker to get started with trading micro-cap investing.
We recommend some in-depth research before deciding on a broker. Not every investor is going to have the same brokerage needs and not every broker offers the same services. Therefore, there are many factors to consider besides price.
One of the first things to consider when choosing a broker is your investing style. In particular, how important is it for you to have direct access to a real person? Are you comfortable conducting your own due diligence or do you prefer getting personalized advice?
If you?re the type that will need some hand holding and assistance when selecting a prospective investment, remember that no matter what the size of your portfolio, a good broker should be available and actively help you with your investments. On the other hand, if you?re the type that does not need much broker assistance, you may want to look into the brokerage firm?s customer service reputation in case a problem with your account should ever arise.
Another question to ask yourself is what else will you be investing in or what other services do you desire?
For instance, while MicroCap Gems focuses on the micro-cap stock arena, you may also want to invest in larger stocks, mutual funds or bonds or even options. The list can go on and on. In addition to certain investment types, there may be certain services you wish to have access to such as local offices, check-writing and ATM access, personal loans, etc. Not every broker will offer all types of investments or services so be sure to be aware of what options you want when researching potential brokerage firms.
You should also consider how often you plan on trading and what the size (both in terms of dollars and number of shares) most of your trades will be?
This is when you may want to compare how much the different brokers will charge in commissions and fees. Make sure you read the fine print so you don?t get caught with surprise restrictions or fees. Remember that certain firms may charge annual or extra fees for different types accounts or for foreign or OTCBB listed stock transactions. Plus, it is not uncommon for discount brokers to limit the number of shares you trade at a preset price.
Finally, just because a broker doesn?t fit your investment style, doesn?t mean it?s not a quality company. Remember that every successful investor needs different tools for his or her own personality and no single broker is going to be a perfect fit for everyone.
The recent crisis affecting many financial institutions has the Federal Trade Commission warning investors to be on the look out for emails and phone calls trying to take advantage of the recent events.
Market capitalization and what makes a microcap stock
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