Stock Broker or Stock Analyst – What's the Difference?
Depending on the type of investment you intend to invest, you may need to hire a broker to handle your investment. Brokers work for brokers and have the ability to buy and sell stocks on stock exchanges. You may be wondering if you really need a broker. If you intend to buy or sell stocks on the exchange, the answer is yes, you must have a broker.
Stockbrokers are qualified and regulated professionals who represent investors in the trading of stocks and other securities through market makers. In order to become a US stockbroker, a person must pass the exams, such as the General Securities Representative exam, also known as the "Series 7 exam". In addition, most brokers have a business or financial background with a bachelor or master's degree.
Differentiating brokers and analysts is important. Stock analysts basically analyze the stock market, predict what it will do or not do, and predict the performance of specific stocks. Keep in mind that some brokers are also analysts, and vice versa.
Stock analysts basically do a lot of research and advice to help companies and customers to make investment Decision. They read the company's financial statements to analyze commodity prices, sales, costs, fees and tax rates to determine the value of the company to help predict future earnings. Sometimes, analysts meet with company officials to understand the company and determine the effectiveness of corporate governance. Analysts typically study the industry as a whole and assess current trends in business practices, products, and industry competi- tions. They also adhere to regulations and policies that affect the industry and supervise the economy to determine its impact on earnings.
Putting all this together, analysts write reports and give speeches, citing their recommendations, whether to buy or sell specific investments or securities. Analysts use "buy", "sell", "market performance", "overweight", "hold" rating to summarize their reports.
Stock brokers are usually there to indicate buying or selling stocks, and do not have to analyze them. Securities trading must be conducted between two members of the Exchange. Basically, the typical person can not just walk into the stock exchange and trade.
Stockbrokers perform three types of services: executive, advisory and free. Only perform, or discount brokers, just perform the customer's instructions to buy or sell, no more. Consulting and free trading are done by a full-service broker who does research and offers advice. In a consulting transaction, the broker acts as an advisor and advises the client to buy and sell the stock, but will decide to make up for the investor. In free trading, stock brokers know the customer's investment objectives, and then make decisions on behalf of customers.
If you are new to investing, you may need to go to a full service broker to make sure you make an informed investment. They can provide you with the skills you lack at this point. However, if you already know the stock market, what you really need is a discount broker to make your deal.