Make Smart Investments on Your Own, or With a Broker

You have worked hard your whole life for your money, and now you have a little put aside for investing.  Interest rates are so low that your returns are minimal on standard savings account and CDs. It is time for a change, and to have your money work for you. It is time to start investing. You can go through a broker, or you can do it on your own. Examine your options to maximize your chance of success.

Investment Brokers and Brokerage Firms

According to the U.S. Securities and Exchange Commission, a broker is a person that performs trades for a client. They are generally paid by commission taking a percentage of the client’s earnings. Using a broker makes sense, if you do not have the time or experience to track your investments. Their advice is based on their experience, but their work on your behalf does require a fee.

Brokerage houses vary in services and the products that they provide. A larger firm can handle more diverse investments, while a smaller company might have limited access to investment possibilities.  The more benefits you receive from a brokerage firm will cost you in fees and commissions. The firms that cannot offer as much might cost you your investment with poor or risky advice.

The Potential of Your Own Work

If you decide to invest on your own, then putting a plan into action is your first move. Decide upon your goals, the amount you can invest, the amount of time you have to grow your investments, and the risk you are willing to take. There are no guarantees once you step outside the low risk and low reward confines of a savings account or CD. The benefit is a better return on your initial investment by taking that risk.

Investing is a long-term game.  It may have short-term gains or losses, but all things can be turned to your advantage with the right plan.  The stock market may be going down, and you are losing investment value, but now your money is worth more because you can buy more stocks for less.  When the market inevitably goes back up, your loss has now been turned into a gain.

Age and risk have an inverted relationship.  According to the CNN money article, “The best advice for new investors,” the older you get, the less risk you should take. Allocate only the money that you are comfortable losing or not having easy access to. Invested money is usually not liquid and is unavailable for emergencies. This all goes to having a plan in place and being ready for the ups and downs of life.

The Tools of the Trade

If you decide to try your hand at brokering for yourself, there are tools available to help make you a success. Just like real estate is location location location, investing is research research research.  Services like eSignal’s LiveCharts have live streaming capability giving you information about the stock market in real-time trading charts. Charts like these provide you access to all the information you need to make trades grow your investments.  If you’re uncomfortable with the idea of researching, you should look at services like Betterment to help you create a cost-effective investment strategy, which is balanced and doesn’t require work on your end.

With a plan and the right tools, you do not need a broker to be a success in the stock market. You need to keep up with your research, and stay aware of what your money is doing. The right tools will give you the access and information you need to be a great investor.