How do you avoid biased brokers and find reliable information?

1 What is a broker and why do you need one?

A broker is a person or a firm that acts as an intermediary between buyers and sellers of securities, such as stocks, bonds, or options. Brokers charge fees or commissions for their services, which vary depending on the type and size of the transaction. You need a broker to access the stock market, because you can't buy or sell securities directly as an individual investor. Brokers also provide other services, such as research, advice, and education.

2 What are the types and functions of brokers?

Brokers come in different types and functions, depending on the level of service and involvement they offer. Full-service brokers, for example, provide a wide range of services, such as research, recommendations, portfolio management, and financial planning. However, they may charge higher fees and commissions and have a conflict of interest if they receive incentives from the companies they recommend. Discount brokers offer lower fees and commissions but provide fewer services; they mainly execute orders without any advice or guidance. Online brokers are the most cost-effective option, operating exclusively online with minimal or no human interaction and relying on technology and automation to execute orders. They may also offer features such as robo-advisors, trading apps, and educational materials.

3 How can you avoid biased brokers?

In order to avoid biased brokers, it's important to be aware of potential sources and signs of bias, and to do your own research and due diligence. To start, check the broker's credentials and reputation using online tools such as BrokerCheck. Additionally, read reviews and ratings from other customers, and ask for referrals from trusted sources. Understand the broker's fees and commissions by asking the broker to disclose all charges, and comparing the fees with other brokers. Be wary of brokers who pressure you into buying or selling certain securities, or who make unrealistic promises. Also be aware of brokers who use aggressive or misleading tactics such as cold calls, unsolicited emails, or false testimonials. Lastly, diversify your portfolio across different asset classes, sectors, and markets; adjust your strategy according to your goals and risk tolerance; monitor your portfolio's performance regularly; and review your broker's statements and reports.

5 How can you improve your skills in working with brokers?

If you want to improve your skills in working with brokers, you should educate yourself and practice regularly. Start by learning the basics and terminology of the stock market, such as how it works, what types of securities there are, and how to read charts and indicators. You can use online courses, books, or podcasts to gain knowledge. Additionally, develop your own strategy and goals based on your risk profile, time horizon, and expected returns. Have a clear plan and budget for your investments and stick to them. Don't let the broker or the market influence your decisions. Before investing with real money, practice with simulated or small-scale trading using online platforms, apps, or games. This is a great way to test your skills and strategies, as well as learn from mistakes and successes. Doing this will help you improve your confidence and competence.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?