phne no


Love your enemies. And pray for those who persecute. –Matthew 5:44

19 Apr 2018


Hi friends, Most investors, particularly newcomers, tend to rely heavily on their stock brokers for investment information and advice. Though stock brokers can be valuable sources of information, their advice must be taken with a pinch of salt. There are several reasons for this.

1)      Stock brokers are too close to market to be in a position to give really good advice. Their proximity to the market and their daily contact with a wide range of speculators, traders and investors makes them particularly vulnerable to rumours, tips and so-called insider information. This naturally influences whatever investment advice they give.

2)      Also stockbrokers’ advice generally tends to be in the nature of reflex action to spot news and daily share price fluctuations.  They are very rarely able to sit back and take an objective bird’s-eye view of broad economic and industrial trends.  As a result, their advice tends to be heavily slated in favour of the speculator and short-term trader in shares.

3)      Stockbrokers are generally overworked and busy men.  They get very little time for study and analysis, and for sober reflection on current economic industrial and market trends.  The very nature of their work prevents them from undertaking in-depth investment research.  As a consequence their advice tends to be superficial and is rarely backed by solid research and reasoning.

4)      A stockbroker’s livelihood depends upon the commissions he earns from buying and selling shares.  Therefore, his natural inclination is to give advice for short-term investments.  This is another reason why you can rarely get good solid long-term investment advice from stockbrokers.

5)      The stockbroker’s main function is to buy and sell shares on your behalf.  He is primarily an agent and not an investment analyst or adviser.  You should use him as a valuable source of investment information, particularly on current market trends and prevailing market opinions, but avoid taking his investment advice at face value.  Always cross-check and re-examine his advice before acting on it. You follow none, but you learn from everyone.  Take your own decision and think positively.

6)      God Bless You,                                        See you later. 

No comments:

Post a Comment