No Broker Necessary: 4 Things to Know When Trading Without a Broker

by Nick on May 30, 2014

This is a guest post.

With the help of the Internet, playing the stock market has become significantly easier. Your chances of striking it rich aren’t any higher, but you have more information and tools at your fingertips. With all the resources out there, the need for a fulltime stockbroker has all but vanished for casual traders.

After reading this, you’ll be able to shake the need for a broker and feel comfortable flying solo.

Keep Up With the Global Market

Stockbrokers spend their whole day watching the markets and following the companies that their clients invest in, but you don’t have that luxury. Staying informed requires two elements: increasing your knowledge base and staying updated on the stock market.

Consider participating in finance Twitter chats, building an RSS feed of finance blogs, or even enrolling in a course at your local community college. Choose whichever way is easiest and that works best with your schedule, as long as you’re constantly increasing your investment and financial know-how.

For the second part, you can follow your favorite blogs for stock market news, or you can download the MarketMinder App, which offers insightful commentary on global markets and sorts it into multiple sections. While it’s easy to get overwhelmed by the amount of advice and stock coverage out there, this app breaks stories down by featured articles, commentary, research, and headlines. Without this kind of knowledge, you might as well be playing the market blindly.

Start Small and Stable

With the recent IPOs of companies like Twitter and, many rookies have invested in the stock market to jump on the tech bandwagon. More so, they’re investing in unknown start-ups in hopes of buying into the next Google.

Investing in flashy names like Facebook and Twitter is more expensive, and investing in unstable companies is riskier. When you’re looking into the types of stocks to initially invest in, consider buying into basic materials and chemicals that are used for multiple purposes. Remember, you’re buying into a company when you invest in its stock, so start with something that’s going to be around for a while.

Remember That Investing is a Marathon, Not a Sprint

If you want to take a risk and grow your money in the course of an afternoon, then go to a casino. Investing in the stock market isn’t for amateurs who want to make a quick buck. Some brokers recommend creating a five- to 10-year plan as a way to help new investors start thinking in the long run.

Don’t invest because the market is starting to pick up, because in five to 10 years, it likely will take another turn for the worse. Everyone compared the recession of 2008 to the previous one in the early 1990s. Just because the market has recovered now doesn’t mean there won’t be another recession down the road, the stock market has ebbs and flows.

Diversify Your Portfolio

As you start expanding into multiple stocks, it’s important to buy into unrelated industries and companies to protect your investments.

For example, if someone had invested in Boeing, Delta, and United in 2001, then all of their stocks would’ve plummeted in the wake of 9/11. However, someone who invested in Boeing along with Qualcomm, a semiconductor company, and Cinemark, a movie theatre company, would’ve only seen one of their stocks fall as airline restrictions increased in the following years.

When an industry is in a crisis, it affects all companies, including companies in related industries. The more diverse your portfolio is, the lower the probability that you’ll be wiped out by one global event. Furthermore, investing in multiple stable stocks is a way to essentially set aside money. Rather than placing it in the bank and watching it grow with interest, you’re watching it grow with the companies you buy into.

The key to investing without the help of a broker is to stay informed about the market, current events, and the companies that you’re invested in. Investing isn’t a short-term game; it’s a long-term commitment. Those with the willingness to invest time along with their money will be successful.

This post was a guest post. The content of this guest post is the sole responsibility of the sponsor of the post and not SAFTM.

{ 1 comment… read it below or add one }

debster @ June 2, 2014 at 5:00 pm

I need to do try to handle my investments with out a broker, so I’m trying to educate myself. I find it very boring though to follow the markets. Any tips to make it more fun?


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