Useful General Advice on Brokers You Should Not Ignore

Useful General Advice on Brokers You Should Not Ignore

Follow up on your broker whenever you have made an order for a buy or a sell. This is very important. In May 2006, I wanted to acquire some First Bank shares valued at about NGN 35 – 37. I gave some money to the broker and specified my request. This was the way we used to do business.

I was hoping it was going to be as it was in the beginning, so shall it be now and forever, world without end. Amen.” A week later I casually asked for the stock standings with them and I noticed my account was still credited and there were no new First Bank shares on the report.

I followed up with a call and it was noticed that the purchase was not made. When I tracked the shares it had jumped to 50.

It was a rude awakening. I missed out in the 1 for 1 bonus just because I did not check on an order I placed. Don’t make my mistake. Learn from it.

Never forget that whether the broker sells | buys at anytime they make money. Whether you are losing or gaining, they still make money.

Another valuable advice Ill proffer concerning brokers is that you chose your kind of broker. If you chose a broker who deals in kazillions and all you have is thousands, there seems to be an imbalance in this.

No matter how zealous you might be about learning and investing, he might just feel you are wasting his time. You are not in the same echelon.

Why this is very important is that you need a stock broker that you can “vibrate” on the same frequency. A broker who understands your needs.
A little story will illustrate this.

I once had a childhood friend in my secondary school days. The events of life occurred and after secondary school we lost touch.

I wanted to see this guy by all means. I dreamt of him sometimes and even wondered whether we would ever meet again. In my private time I reminisced the time we shared together and the things we did in our childhood days. One day out of the blues he appeared.

I was very, very happy to see him. The joy of meeting again after about 8 years gladdened our hearts. After the first hour of meeting, the second hour set in and the level of excitement dropped. We had very few things to talk about.

I wondered what happened. Then I realized, our values have changed over the years. Our interest differed and we couldn’t vibrate again on the same frequency. In as much as we were happy to see each other, there was nothing to sustain our union.

The same happens in this business. Imagine having a stock broker that continually inundates you with tips and you are a conservative investor that can only invest once a quarter? Does he understand what you want? Imagine you are a 52 year old with 4 kids and your broker is 25, single and living on the fast lane. Can he relate to your concerns, or understand why you do the things you do? Imagine a broker who calls you often to sell XYZ stock because it has appreciated 50% and you are in the game for the long run. This issue is all about connecting, playing on the same field. As Warren Buffet once said “Wall Street is the only place that people ride to in a Rolls Royce to get advice from those who take the subway.”

Meaning if you are in a Rolls Royce, get a Rolls Royce advice.
If you broker cannot understand what you want, then this spells disaster.

In all you do, if you have any issues with a stock broker, please send your complains to Securities and Exchange Commission (SEC). You can get information about their nearest office to you by checking their website.

It is a worthy thing to do a thorough check on who your broker is before you start doing business with him. I still do not understand why people would just give money to anybody and expect him to invest for him. As it is famously said, “a fool and his money are soon parted ways.” Don’t be the fool. Never forget to use professionals in all your dealings, but don’t be used by the professionals.

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