Choosing An Investment Stock Broker

If you want one.

And I don't recommend any broker with whom to trade who will be giving you advice on what to buy and sell. When a broker speaks it is a eulogy for your money. My definition of a broker is one who makes you broker.

The reason I say this is that when I owned my brokerage company I hired and supervised over 300 brokers. The actual number of good traders I could count on one hand and have fingers left over.

Let's understand that a broker is hired by a brokerage company for one reason - to generate commission, not to make you money. He is trained to analyze stocks or mutual funds, but not to protect your capital. Pitifully, he thinks he is. They never tell you to sell before a stock falls to 50% of its value. Most of the time brokers are left to themselves as to what they recommend to their customers, but there are many brokerage houses that will insist that they push some particular stock of the day or new Initial Public Offering (IPO). Many times he has a quota - and you're "it".

Don't deal with a relative. Do I have to explain this?

If you live in a small town, don't deal with anyone who also lives there. You don't want everyone knowing your business and anyone in that local office can see your account if they want to.

The average broker has 300 accounts and you know those with six and seven figure amounts are the ones he calls. Those people with less then 100K seldom get attention. Understand you are on your own which in most cases is best.

Be careful of any broker who advocates fading the market. I can hear him now, "This stock has gone so low it has to come back". This is a death wish for your money. Bottom pickers end up with smelly fingers.

A broker who calls you and says he has a "system" must be highly suspect. If that system is so good then why is he willing to share it with you? He should be independently wealthy by now. Be suspect of any broker who calls you out of the blue with a "story". I don't care how good it is if you don't know this "Billy Sol". These guys refer to you as mushrooms. I wonder why. Maybe because mushrooms are grown in the dark and fed horse manure.

Never trade commodities with a stockbroker. There is a world of difference in trading stocks and commodities. Stockbrokers don't think fast enough. You shouldn't have someone who is used to driving a kiddie car trying to handle a Formula One.

Make any broker prove what he says. Get references. What you want from a brokerage company is proper execution of your order at a low price, not advice. Your best bet is a discount broker because they are not allowed to give you "advice".

Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.

Copyright 2005

[email protected]; 1-888-345-7870

In The News:

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For new investors, starting SIP in Nifty50 and Nifty Next 50 is ideal: HDFC Securities  Moneycontrol.comFor *fresh* investors, starting with SIP in Nifty 50 and Nifty Next 50 is ideal. On the way, they have to learn about evaluating stocks and their valuations, Deepak ...
Top 10 stocks that mutual fund managers bought and sold in March 2019  Moneycontrol.comData for equity flows into mutual funds for March came as a breather after a weak February. An increase in net inflows in equity and income category led to the ...
Is your mutual fund buying or selling stocks too much?  LivemintA turnover ratio measures the extent to which a fund manager churns her portfolio.If the portfolio turnover is greater than 100%, that typically means that the fund ...
Here are the mutual fund favourites in April  MoneycontrolMaximum month-on-month change in value was seen in TCS, ICICI Bank and Kotak Mahindra Bank.
Stay away from stock tips  LivemintIf taming the stock market was easy, everyone would do it.Losing money in market is real and facing volatility is part of the deal.
What India's top three mutual funds bought and sold in March  Economic TimesIndias largest money manager held 1.5 trillion rupees in equities.
What top mutual funds bought and sold last month  LivemintMumbai: Inflows into Indian equity mutual funds in January were the smallest in two years as heightened market volatility and political uncertainty cooled ...
Mutual funds bet big on these 30 stocks in November; do you own any?  Moneycontrol.comThe Indian equity market rose about 5 percent in November but what was more heartening to see was inflows into mutual funds. Investors pumped Rs 1.4 lakh ...
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Govt increases limit to disclose investment in stocks, mutual funds for employees  Moneycontrol.com*Service* rules say no government servant shall speculate in any stock, share or other investment.
I want to invest Rs 1 crore in stocks and mutual funds for 5 years. How should I invest?  Economic TimesYou may consider the following asset allocation: 40% in large-caps; 40% in large and mid-cap, or multi-caps; and remaining 20% in mid- and small-cap funds.
What India's top three mutual funds bought and sold in February  LivemintMUMBAI: Inflows into Indian equity mutual funds in February were the smallest in more than two years as savers held back investments amid market volatility ...
How concentrated is your mutual fund portfolio?  LivemintA concentrated portfolio can backfire badly if the fund manager's strategy goes wrong.A portfolio with few stocks can fall sharply if share prices of most stocks in ...
A young investor’s guide to mutual funds  Economic TimesMany young investors, who are barely a year or two old in their career, are eager to start investing in mutual funds. ETMutualFunds.com receive many queries on ...
Can mutual funds give multibagger returns like stocks?  Economic TimesStocks can be multibaggers. They can offer extraordinary returns in a very short period. Can mutual funds ever do that? This was a question thrown at Rajeev ...
Mutual funds sell several blue chips stocks, buy mid-caps in March  Business StandardDomestic money managers were seen pruning their holdings in several blue-chip stocks, including Reliance Industries (RIL) and Housing Development Finance ...
7 stocks most favoured by mutual funds over last one year  Economic TimesAs the markets hit a speed bump, stocks favoured by mutual funds appear to be safer bets.
Should you invest in international mutual funds?  LivemintIf you were to sort all equity mutual funds available for retail investment by their one-year performance, international funds would come on top. The best ...
Active mutual funds fail to reflect index gains  Economic TimesThe Nifty, which has hit all-time highs for the second time in April, has advanced 12% in the last one year. But these gains are yet to reflect in many mutual funds' ...
Stick to MFs if you lack knowledge on stocks  LivemintWhile equity is surely the way going forward considering your age and the financial goals, how you buy in equity is important.Direct stocks work very well if done ...
The dangers of high mutual fund inflows  LivemintMutual funds have put ₹2.4 trillion into markets in the last two years.Equity mutual funds receive ₹8000 crore monthly through SIPs.
How income from stocks and mutual funds are taxed for an individual  Moneycontrol.comCapital gains from transfer of unlisted share are considered as STCG where period of holding is less than or equal to 24 months, and LTCG when holding period ...
Why your core equity portfolio should be in index mutual funds  Economic TimesInvestors flock to the performing fund “after” it has beaten the index. Fund selection is not an exact science, and there will be hits and misses.
Stocks vs Mutual Funds: Which is a Better Option to Invest?  EntrepreneurStocks and Mutual Funds have their own set of hiccups, which are better to know before making your investments.
Investment limits Sebi prescribes for mutual funds  LivemintDid you know that there are guard rails that the Securities and Exchange Board of India (Sebi) has put in place to protect you from the risks of over-exposure to a ...
Here are a few mutual funds that stocked up on YES Bank in Q4FY19  Business StandardShares of YES Bank tanked 30 per cent in trade on Tuesday, after the bank reported a massive Rs 1,507 crore loss in the fourth quarter of financial year 2018-19 ...
Top 30 stocks that fund managers bought & sold in March; do you own any?  Moneycontrol.comTop 30 stocks which witnessed strong buying according to change in value include names like NTPC, ICICI Prudential, L&T, SBI Life, SBI, Jubilant Food, Maruti, ...
What top 5 money managers bought and sold in February  Economic TimesFebruary was the fourth consecutive month of decline in net investment into equity mutual funds.
What to do if your mutual fund scheme earns more return than your investment  Economic TimesAre the returns shown in your mutual fund account statement same as the returns delivered by your fund? It is quite likely that you might have earned less than ...
Mutual Funds increase holding in ‘attractively valued’ oil & gas stocks  Economic TimesMUMBAI: Mutual funds have been adding shares of oil and gas companies such as GAIL, HPCL, BPCL and ONGC over the last few months, encouraged by ...
Mutual funds shooting themselves in the foot?  Economic TimesWhat if banks take a leaf out of Kotak and HDFC Mutual Funds' decision to direct investors to come another day to get their money instead of paying them on the ...
Here’s a better tool to judge mutual fund performance than simple 1-year, 3-year returns  Economic TimesOne invests in mutual funds to earn potentially higher returns than those in traditional investment products, and I'm sure everyone looks at the one-year, ...
Spending time in stock market is must for wealth creation: Chandresh K Nigam, Axis Mutual Fund  Economic TimesInvestors make the mistake of projecting recent market performance onto the future and follow the market.
Here are 30 stocks that fund managers bought & sold in February  Moneycontrol.comEven the month of February witnessed the lowest inflow in equity mutual funds in the last 2 years. Only Rs 5122 crore of *fresh* inflows took place in equity funds.
Top 8 most common mutual fund investing mistakes and how to avoid them  Business StandardMutual funds garnered Rs 8,022 crore of its assets by way of SIPs in December 2018, 29 per cent higher than the previous year | Illustration: Binay Sinha ...
Fund managers ready to go shopping after sharp correction in stocks  Moneycontrol.comDomestic fund managers are capitalising on the market fall and buying shares as they feel the valuations have become attractive after a sharp correction in the ...
Mutual Funds bet big on banks, exposure up about 50% from FY18-end  Business StandardMutual funds (MFs) are shuffling their sectoral exposures for 2019-2020 as they look to improve their portfolio returns. MFs' exposure to the banking sector ...
Investment in equity MFs drops 35% to ₹1.11 lakh crore in FY19  LivemintNEW DELHI: Investors pumped in more than ₹1.11 lakh crore in equity-oriented mutual fund (MF) schemes in 2018-19, a decline of 35 per cent compared to ...
Common investment mistakes to avoid  LivemintRemember, time in the market is key, so don't get affected by volatile conditions.Here are some common mistakes you should avoid while investing.
Diversify equity portfolio with international funds  Economic TimesAs a part of diversifying your equity portfolio, wealth managers believe investors should diversify geographically using mutual funds. They can do this by ...
27-year-old rule changed: Disclosure limit on MF, stock investment up for bureaucrats  Economic TimesGroup A and B officials had to intimate government if total transaction in shares or MFs exceeded Rs 50K.
From Axis to ICICI: Mutual funds lap up private bank stocks ahead of rally  Business StandardDomestic money managers aggressively bought shares of private sector banks in February. Kotak Mahindra Bank and Axis Bank were the two most-bought ...
Investing in mutual funds? Size of fund doesn't matter  Economic TimesA bigger MF is not always a better fund. If you come across a well-performing small fund, invest in it.
Hot and Cold Stocks of Mutual Funds in April 2019  MoneylifeIn April 2019, Larsen & Toubro and Hindustan Petroleum Corporation(HPCL) were the most preferred stocks of Indian mutual funds.
Why HDFC Bank stock is among the top picks of mutual funds  Business TodayPrivate sector lender HDFC Bank, the third-largest Indian firm by market capitalisation, is among the favourite stocks in the portfolios of mutual funds. Despite ...
Why do wealth managers recommend multi cap mutual funds?  Economic TimesMany wealth managers believe multi-cap funds are a good starting point for long-term investors, specially those using SIPs for wealth creation.
Equity funds record highest ever exposure in banking stocks in March 2019  Business TodayAs per the latest data available from the SEBI, overall deployment of equity funds in bank stocks grew around 52 per cent year-on-year (y-o-y) in the month ...
Fund managers raised stake in 194 stocks in Dec quarter. Is it a good idea to follow them?  Moneycontrol.comFund managers raised stake in as many as 194 companies in the December quarter as compared to the previous quarter. Stocks of some these companies have ...
Private banks, oil & gas companies find favour among fund managers  Moneycontrol.comMoneycontrol News. The month gone by saw a notable change in sector and stock allocation of funds from the mutual fund industry. On a month-on-month ...
Large cap index mutual funds continue to outshine actively-managed large cap schemes  Economic TimesLarge cap index funds are outperforming the actively-managed large cap mutual fund schemes in the past one-year period. Kotak NV 20 ETF is topping the ...
Top 10 large, mid & smallcap stocks MFs bought in April; do you own any?  MoneycontrolMutual fund (MF) inflows moderated in April even though Indian stock benchmarks rewrote history. The Sensex touched a *fresh* record high of 39,487 on April 18 ...

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