Introduction to Using Financial Services Wisely

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Find an investment professional with your best interests in mind, and learn how to use the basic trading mechanics.

What you will learn

  • Full-Service Brokers
  • Fee-Based Planners
  • Discount Brokers
  • Market and Limit Orders
  • Buying on Margin
  • Shorting

What do you know?

Introduction to Using Financial Services Wisely

Once you consider taxes and decide what type of investment account you’d like to open, the next nuts-and-bolts decision involves actually choosing a broker.

When thinking about a stockbroker, a picture of Charlie Sheen from the movie Wall Street often comes to mind. Thoughts of cold calls interrupting your dinner and pushy salesmen trying to sell the latest "hot stock" can scare investors away from buying stocks. In reality, however, it isn’t so bad, and there are many options to choose from. In this lesson, we’ll aim to provide the information you need to pick a broker that will help you reach your financial goals.

Think of a broker as the middleman between you and the person you are buying your stock from or selling your stock to. When you place an order to either buy or sell a stock, your broker will find a party that is willing to take the other side of your transaction. Of course, the broker will charge a fee (commission) for this service. There are hundreds of brokers and other financial advisors, and they provide varying levels of service. For the purpose of this tutorial, however, we’ll focus on three types of service providers: full-service brokers, fee-based financial planners, and discount brokers.