It’s not easy these days being a stock broker. When I go to dinner parties, I get more than a few dirty looks. Sometimes when people ask me what I do, I tell them I’m a school teacher. It seems that people aren’t too high on Wall Street these days, and who can blame them? The market is down nearly fifty percent over the past year and Wall Street deserves much of the blame. But on the rare occasion that someone actually does ask for my advice on how to trade stocks, I give it to them.
I tell them they can either set up an account with a broker or they can manage their own accounts. Since brokers are held in such low regard of late, many investors have decided to go out on their own and trade stocks online. I always warn these mavericks that it is important to learn how to trade stocks before trading online. Sure, brokers have a tarnished reputation, but they can still provide invaluable advice and can help you create a balanced, diversified portfolio.
But most of the people I talk to don’t think it’s important to learn how to trade stocks. They think they can just learn as they go. I caution these tyros to take it slow and invest conservatively. They simper and nod their heads as if to say, “whatever.”
Some times I run into these folks a few weeks later and they sheepishly confess that they lost tens of thousands of dollars trading on their own. If only they had learned how to trade stocks they wouldn’t have lost their hard-earned money.
At that point they are usually ready to listen to my advice and I tell them how to trade stocks. I tell them to read the Wall Street Journal and every other financial newspaper or magazine they can get their hands on. I tell them to watch a few stocks very closely so they can get an idea about how they trade. I also tell them to trade in small quantities. Online trading is not about making a big score, it’s about making a little profit each day, which in the long run can accumulate quite nicely.
They smile and sincerely thank me and walk away with a better understanding of how to trade stocks. I smile, too. It’s nice to know some people still listen to stockbrokers.
