Are there any limits to amount of investments a stockbroker can enter?
I know that stockbrokers main job is to invest. But, when an investment is unsuccessful how do a person get rid of that investment? Can another investment improve that previous investment? #finance #economics #stockbroker
2 answers
Jared Chung
CareerVillage.org TeamJared’s Answer, CareerVillage.org Team
No, you can trade in and out of positions as often as you like. However, you need to be aware that every time you make a trade there is a fee. The fee may be small, but if you plan to trade very often then the fee will add up and eat into your profits. So let's say that you invest $100 into a certain stock. Let's call it "Jared Co." If your $100 investment in Jared Co. loses 10%, then it will only be worth $90. If you want to sell it, you place the trade, which costs a fee, so you maybe have only $89 (fees differ greatly based on a variety of things, so it isn't that simple). Then you invest that $89 in another stock which we'll call "Lindsey Co." (again with a possible fee). That stock may gain 10% which would increase your $89 to $97.90. You can continue to do this over and over and hopefully make money for your clients.
If this is interesting to you and you would like to learn more about investing, I recommend you join or form an investing club in your high school, read any of the many many blogs about investing, or read a book about investing. You could even join a "virtual" trading competition where you pretend to invest with a certain amount of fake money, but using real stocks. There are also many great places to learn more about money management in person including at your local university or community college. Just remember that investing is a wonderful skill that can (and must) be honed over many hours, days, and years of reading and learning. The relevant college major is called Finance (which is often a subset of business). I majored in Finance in college. Enjoy!
Michelle Hoque
Michelle’s Answer
Definitely not an expert in this area but an avid follower of blogs about investing as I am currently trying to getting my finances back in order which includes be smarter about investments. I agree with Jared that virtual practice trading is useful especially when you are younger and want the experience but not necessarily have enough money saved to start investing or worry about the additional fees to sell and buy investments. Just to add, some banks or investment firms offer practice trading accounts/fake money to invest in various different investment products from stocks, exchange traded funds, mutual funds, etc. It might be something that you might what to search with local bank of choice.