Every investor should look for and hold on to a broker he can trust and in whom he has confidence. Your broker can handle all of your securities transactions, and his service buys and sells all of your stocks. In the trade, he is known as a registered representative, a title that has now supplanted the old designation, "customer's man."
The broker is a registered employee of a brokerage firm, preferably one which is a member of the New York Stock Exchange. He is not a broker as such, but is the liaison between you, the customer, and the firm's commission broker who executes orders on the exchange floor.
The representative's job is to extend to investors all the services of his firm. He will, first of all, transmit your orders to buy or sell securitiesstocks or bonds, listed or unlisted (over-the-counter), domestic or foreign, in round lots, odd lots, or piecemeal through the Monthly Investment Plan. He will also buy or sell rights or warrants, which, in simplest terms, are options to purchase a certain number of shares of a stock issue. He will arrange the purchase or sale of commodity futures grains, coffee, cotton, soybeans, whatever you are interested in.
He will place any type of order you specify: at the market, limit, stop. He will buy on margin or arrange a short sale.
He will be available for consultation on the merits of particular stocks or industrial groups, or for analysis of your entire portfolio. He will supply stock studies, newsletters, market analyses, and whatever other literature his firm issues. He will hold your securities for you in the firm's vault, collect your stock dividends or bond interest, and send you a periodic statement on any shares held for your account.
His fee is the standard commission you pay on the purchase or sale of securities. There are no other charges for his services (although you will pay interest, naturally, on money you borrow from him for a margin purchase).
Your representative will notand should notserve as a stock market tout or tipster. Unless you request him to, he will not volunteer advice on buying or selling. He will not choose for you between two stocks that seem equally attractive. He will not hustle you into the market and then sell you out; the fast turn-around is not his way of doing business.
Be frank with your broker. The more you can tell him about your circumstances and objectives, the sounder his advice will be. There are more than a thousand stocks to choose from. Their prices differ, their yields differ, the reasons for buying any one of them will differ. Your broker can help you narrow the choice more sensibly if he has an idea of your income range or tax bracket, how much you can invest, how frequently, whether you have other stocks and, if so, which ones, and whether you are looking for income, growth, diversity, or simply playing hunches.
Do not worry about being high-pressured. The decisions are all yours. There is no need to buy anything or any amount you can't afford or don't want. Many brokerage firms are paying their representatives' salaries, rather than commissions, to eliminate the possibility of personal involvement in whether you buy or not. So, listen carefully, and then make up your own mind. It's likely you'll be glad you did.