Talked to my good friend Rodney last weekend and asked him for tips on choosing a stockbroker. Since the bulls went wild last year, more people are thinking of putting in some dough in the stock market. The oldest piece of advice and still the most important one is: don’t play to make a quick buck. If you want to invest, do it for the long term. Pay close attention because this is an insider’s tip. Our conversation went like this:
Rod: Choosing a broker is like looking for a boyfriend or a husband.
Salve: Hmm.. I look for someone who will spoil me and buy me stuff?
Rod: That’s the grateful partner who is thankful you love him and trust him, so he will watch out for your investments.
Be careful of the charismatic or the bolero type. The one who will promise you the moon and the stars, but will leave you brokenhearted when he gets what he wants. He is the broker who will boast of his right calls and his earnings, yet hide his losses.
Meron din Mr. Torpe. He is the type who will only take your orders without giving advice.
But every girl likes the “bad boy.” This one likes to ride the volatility of the market. There is no such thing as “insurance selling” or “topslicing” for this kind of stockbroker. He plays the speculative stocks and bets everything on them. Some bad boys make a lot of money because of this philosophy, but when they get burned, they can get hurt really bad. To distinguish a “bad boy” investor, watch out when he plays speculative and fast-rising stocks like the BWs, the Philwebs, and of course the current flavor of the market, GEO. For him, its better to crash and burn than fade away.”
I’m crossing my fingers you’re not “with” anyone like these right now. Break-ups can be hard, but some things just need to be done. 
For those who have found THE right one, keep the investing love alive. 
By the way, Ron Nathan had a really great column today and Citibank came up with another article for parents who want to understand investment instruments that could be used to provide for their children’s future.
For newbies who want to get their feet wet in the stock market, the Philippine Stock Exchange’s website has very good material. Exploit it, its equivalent to a free seminar and you don’t even have to get dressed and drive. Happy reading.
July 8th, 2007 at 6:26 pm
money counter fighter…
I do think your right on the spot here, i am going to bookmark your site to see if other people have different views…
April 4th, 2007 at 11:46 pm
If you know what you’re doing and have access to information, choose an online broker… if you need “advice,” stick with a “brick and mortar” brokerage relationship.
March 30th, 2007 at 7:15 am
hi ali,
tnx for clarifying.
i agree with you on your last point. established funds tend to have lower MERs because of economies of scale.
i’ll also assume when you talked of .8% MER that thats for money market funds.
ill be moving on to the mutual fund thread. i have a comment there on fee “double dipping” if you’d like to respond.
ciao.
March 30th, 2007 at 5:44 am
hi oda.
yes, front-end fees are cumulative, distributors normally get a percentage of this as commission
The limit set by law for MER is 10% of fund size, the actual MER per fund will vary, it ranges between 0.8% for operating funds to a high of 3% for start up funds as set up/organization expenses are chargeable to the fund. Fund size is an issue because on a percentage basis, larger funds can absorb the same set of allowable expenses better than smaller funds. ideal minimum fund size is around Php 600M to Php 800M.
back-end fees/exit fees are levied if a client takes out his funds before a prescribed holding period, normally its 1% to 2% for the first year, 0% to 1% on the second year and 0% for two years and beyond.
For potential mutual fund investors, it would make sense to choose funds that are already operating for at least 5 years as set up/pre-operating expenses would have been fully amortized already
thanks
March 30th, 2007 at 2:13 am
meron na palang thread lipat na lang ako don >.