Whether you are looking to further expand your knowledge on investing or you want to start a career in trading, getting involved with the stock market can be a great first step. There are typically two ways to do so — either using a personal broker or trading stocks online. Choosing how to start can be a rather difficult choice, thus a breakdown of the two has been provided below to get you thinking about which of the two ways is better suited for you.

Control

Are you someone who wants to be in control all the time? Then hiring a personal broker may not be for you. Trading stocks online allow you to have full control of all the things you do; you can choose what goes in your portfolio and make trades without waiting for approval from another person. However, trading online can mean you have limited access to some stocks.

With a personal broker, they might be able to access shares that are typically not available to the public. This is because third parties often inform dealers when stocks are available and these are then offered to you through your broker. Additionally, brokers do not take over your stocks completely — instead they guide you through building your portfolio and trading your stocks. Thus, hiring a stockbroker can be ideal if you do not have much experience or knowledge on the stockmarket.

Research

With online trading, there a variety of stocks to choose from. To ensure you are going into a sound investment, you will typically need to research companies to make sure their stocks won’t fall significantly. Online firms will usually have a wide array of tools for you to do research. Because you are in full control of what you want to invest in, you must make your own judgement calls and decide on whether or not a stock is worth investing in. This can sometimes go wrong, and you may end up investing in something unprofitable.

A personal broker will do all the research for you (are these companies good to invest in? What are the typical return rates?), which can save you a lot of time when deciding which companies to invest in. As well, if you have hired a season broker, they will have a better idea of how the market works, thus they can prevent you from investing in something that won’t profit and help avoid scams.

Cost

Whether you are part of an online firm or have hired a broker, you will have to pay some fees. For online firms, the fees is dependent on which firm you choose to trade in. However, the fees to use the services of these online firms are typically all cheaper than hiring a personal broker.

Personal brokers are costly: on top of service fees that are already in place, many brokers also take a percentage off of your overall profit gained from trading. The cost can be worth it though, as experience and knowledge of a broker can be invaluable to good returns. This can be especially true if you don’t have a lot of prior knowledge of stock market trading.

Summary

Both online trading and trading through a personal broker has its own pros and cons. There is no right or wrong choice, it is ultimately dependent on your investing style as well as knowledge and experience in trading, investing, and the going-ons of the stock market.

Trading stocks online can be a great way to start making some extra money, especially if you have had some experience in trading. If you are unsure of what you’re doing, though, it is probably best for you to hire a stockbroker. It might seem expensive, but stockbrokers are typically great at making some good returns since a large part of their payment is on the profit of the investments. As well, if you are looking for access to some shares that are not available to the public, choosing a stockbroker is the best way to do so.

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