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Special OfferFive Steps to a Million
Suppose there was a system that takes every scrap of guesswork out of investing. What if this safe, simple approach allowed you to: rack up profits of over 42,000% in stocks; thrash the Dow, S&P 500 and all the indexes by nearly 4-to-1 year after year; pick only the best stocks and avoid the also-rans every time—without ever relying on the market at all! Click here for the five easy steps that could turn as little as $100,000 into $250,000, $500,000, even one million in just one year. |
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Check Out Your Broker Before You Invest! |
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…the larger the firm and the longer they’ve been around, the more likely there are to be items on the report.
Look carefully at what those items are. Is it a technical violation for filing a tax form late? Not such a big deal.
Is it a lawsuit for fraud or misrepresentation that's been settled for millions of dollars? Now that’s a bigger problem.
What the BrokerCheck Report Won’t Tell You
BrokerCheck won’t tell you how good an individual broker's advice is, how fast an online broker’s web site is or whether or not other investors are happy with that particular broker.
To answer those questions, you’ll have to look for signs of good customer service such fast email response times, extended telephone customer service hours, access to a branch and a vibrant and active online community. For more signs to watch out for, see “Your Online Broker: Are You Getting the Service You Deserve?”
More Basic Questions to Ask
Other basic questions to ask before plunking down your hard-earned money with a stock broker include:
1. Are you a member of the Securities Investor Protection Corporation (SIPC)?
SIPC provides limited insurance in the event that brokerage firm becomes insolvent or bankrupt. But that coverage is only for SEC-registered securities (such as stocks, bonds and mutual funds) and cash up to $500,000 (including $100,000 for cash).
It does not protect against market losses. Futures contracts, annuities and commodities are not eligible for SIPC coverage.
2. What kind of accounts do you offer?
Virtually all brokers offer margin accounts, which allow you to borrow money from the brokerage firm to buy securities. You’ll pay interest on those funds, and the broker has a right to sell any security in your account without notice if the value of the securities in your account drops suddenly.
Some brokers automatically open a margin account for you without asking. If that’s the type of account you want, fine.
If not, make sure you ask for a cash account, through which you will pay for your stocks as soon as the transaction is settled.
