Role Of Brokers Investment Success

By | May 23, 2014

Business-InsuranceThe existence of a broker or brokers in trading activity of shares on the stock exchange is an absolute thing. Investors will not be able to buy and sell shares or if no broker for stock investing always require the services of a broker. That rule.

Therefore, the existence of a broker is always inherent in the activities of buying and selling securities. But, it must be remembered, brokers here are not individuals, but a company that is engaged in the service of buying and selling securities or brokerage that employs people who have a special license as a Broker-Dealer (WPPE).

Indeed, not all investors indulge brokerage firm with charming facilities. For investors whose orientation on transaction costs (transaction fee) are cheap, they tend to invest in companies whose securities the standard amenities. This is usually done by small investors who like to trade quickly on instinct.

Investors like this are very active in buying and selling, though not supported by abundant capital. While large investors, institutional or foreign investors, they usually prefer a brokerage firm that provide complete facility. Large investors usually trade on the basis of rational and fundamental.

They are very reference to the results of research. Large investors are always looking for a reliable broker, the broker who has good research division. Not a few investors who are loyal only because of the research products produced securities firms. If the research results and recommendations are often inaccurate, rarely misses, then he will be approached by investors.

The lower the error rate of the recommendation, the more reliable the company. Recommendations like that would be obtained from the results of adequate research. Through research results, investors can determine the trend of the sector of interest. Thus, investors can predict investment results.

To get the recommendation of adequate research results, investors should be willing to pay extra. The extra cost is reflected in the high transaction costs levied by the brokerage firm. Brokers that provide complete facility, could levy a fee of about 0.3% to 0.4% for purchase transactions and 0.4% to 0.5% for the transaction, including tax.

While the transaction costs specified brokerage firm providing services with the usual amenities ranging from 0.2 to 0.3% for purchase transactions and 0.3% to 0.4% for the transaction. Although the brokerage firm that has a complete facility was allowed to charge higher transaction, not all investors can be served.

They are usually too picky investors. If the brokerage firm generally investors can trade with a deposit of between Rp20 to Rp30 million, not so great on the broker. In order for investors who entered not in vain, the deposit requirement is also not arbitrary, worth hundreds of millions to billions of dollars.

Apart from all these services the differences, similarities in the companies is the proximity effect relationship with the customer. Perhaps even in the capital market can be said that the firm effect is most closely associated with the investors.

Arguably, the securities company is the representative investor in stocks. The brokerage company is also the first source of information for investors. If any issuer corporate actions, the first source of information is so reliable investors are a brokerage company, not the issuer.

Because of the proximity, preferably before investors choose securities companies need to consider several things, such as how big securities firms that put the interests of investors, independent, maintain customer confidentiality, and not oriented to a fee (not encourage customers to buy their own shares do not believe would benefit ).

Brokerage good, in providing investment advice are usually based on well with strong reasons and rational, calculating. If only all of the securities company’s mission is to develop local investors, it could be a growing number of investors will be faster and the value of transactions in the Indonesia Stock Exchange can be shot again.