By James Woolley
When you are running your own investment portfolio it can be a frustrating business. It is hard enough trying not to lose any money, particularly in a bear market, but it is even more frustrating when you have issues with your stock broker as well. So what kind of things are likely to annoy you?
Well one of the first grievances that comes to mind is when you do lots of research, find a company you wish to buy shares in, and then find that your broker is unable to process the transaction. With large companies this is rarely a problem, but with some small-cap stocks it is quite common to be referred to a dealer when you press the confirmation button.
Often it doesn’t matter if you have to wait a few more minutes for an actual person to place the trade on your behalf, but sometimes the price can move higher during this short interval. So you then have to buy these shares at a slightly higher price or cancel the transaction altogether if you are not happy with this new price.
It can also be frustrating when you desperately want to buy or sell shares but your stock broker is currently experiencing some downtime. This can be quite common when the markets rise or fall by a significant amount on any given day, or after a major economic announcement. In these instances you may be able to phone through to a live dealer, but this will often incur higher costs and you may have difficulty placing a trade if there is something wrong with the broker’s technology.
Another common problem may arise when you want to buy a certain amount of shares in a small or mid-cap company, but the transaction is denied because the deal is said to be too large. This is more of a market-maker problem than a broker problem. Nevertheless a good broker will try to negotiate this deal themselves and make sure that you are able to buy the required amount, whilst other brokers will simply refuse the transaction and you will have no other options. You simply have to buy smaller amounts of shares in your chosen company.
To be fair a lot of brokers are very good nowadays. They hardly have any downtime at all and they all have pretty good relationships with the market makers. However you can still encounter a few problems from time to time, even with the very best brokers.
About the Author
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