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3. Broker for Intermediate

Know Your Needs

Before you start clicking on brokerage ads, take a moment to hone in on what’s most important to you in a trading platform. The answer will be slightly different depending on your investment goals and where you are in the investment learning curve.

If you’re just starting out, you may prioritize features like basic educational resources, comprehensive glossaries, easy access to support staff, and the ability to place practice trades before you start playing with real money.

If you have some investment experience already under your belt, but you’re looking to get serious, you may want more high-level education and opinion-based resources authored by professional investors and analysts, as well as a good selection of fundamental and technical data.

A truly experienced investor, perhaps someone that’s executed hundreds of trades already but is looking for a new brokerage, is going to prioritize advanced charting capabilities, conditional order options and the ability to trade derivatives, mutual funds, commodities, and fixed-income securities, as well as stocks.

Be honest with yourself about where you are right nowin your investing journey and where you want to go. Are you looking to establish a retirement fund and focus on passive investments that will generate tax-free income in an IRA or 401(k)? Do you want to try your hand at day-trading but don’t know where to start? Do you like the idea of tweaking and tailoring your own portfolio, or are you willing to pay a professional to ensure it’s done right?

Depending on which path you want to follow, there may be many more questions you’ll need to answer along the way as you gain experience and refine your goals. For now, however, start with these four crucial considerations to help you determine which of the brokerage features we discuss below will be most important to you. To help get those analytical juices flowing, we’ve included several sample questions under each broader topic:

  1. Generally speaking, are you an active or passive investor? Do you want to be super hands-on and execute day– or swing-trades? Do you see yourself eventually leaving the 9-to-5 grind and becoming a full-time investor? Or, instead, do you want to find a few solid investments to hold for the long haul with little or no day-to-day interaction?
  2. How much do you already know? What kind of trades will you want to execute? Are you going to be the type of investor that knows what they want to do and just needs a platform that makes it easy and quick to execute trades, or do you want a broker with a broader range of resources to help you identify opportunities? What kind of securities are you focused on? Stocksmutual funds, ETFs? If you are more advanced, do you also want to trade options, futures, and fixed-income securities? What about margin trading? Do you need access to conditional orders, extended-hours trading, and automated trading options?
  3. Do you want help? What kind? Do you want to go the DIY route, learn how to interpret charts and financial data to find and execute your own trades, or would you prefer to hire a pro? If you want to do it yourself, where are you on the learning curve? What sort of resources will you need to further your knowledge? Will you need easy access to support personnel, or are you able to learn what you need to know through online educational resources? Are you happy to execute trades online, or will you want to call in to have a broker assist you with the process?
  4. What are your goals? What are you investing for? Why are you choosing to invest? Are you trying to supplement your regular income to improve your current standard of living? Is there a specific event or expense you want to fund? Do you intend for this to eventually become your primary income source? Are you trying to build up retirement savings and, if so, do you already have a retirement account or will you want to open a new one with your chosen brokerage?

There are no wrong answers to these questions. Be honest with yourself about how much time, energy and effort you’re willing and able to put into your investments. Your answers may change over time, and that’s ok. Don’t try to anticipate all your needs and goals for the rest of your life. Just start with where you are right now.

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