Stock Brokers

[Rudolph]

I gave a nice chunk of money to two differant brokers and told them I wanted to see who could make me the most money. How long should I give them and how much differance before pulling the money from the low man? Looking for ideas. Thanks Jim

[CorsairIIAT]

With my 401K I Look at it Daily or at the very least once a week. I know I'm kind of anal when it comes to it. I adjust my investments in it quartley. I am currently since Jan 1 2010 at 17.99% gain this year. So I would give them 3 months. Most of my investments can't be moved for a month without a penelty. That is why I go with the quarter rule. But I'm doing ok.

[akadeadeye]

Quote:

Originally Posted by Rudolph I gave a nice chunk of money to two differant brokers and told them I wanted to see who could make me the most money. How long should I give them and how much differance before pulling the money from the low man? Looking for ideas. Thanks Jim

Call both brokers. Get your money back. Invest it yourself in things you know about.

Don

[SpursMVP]

Quote:

Originally Posted by Rudolph I gave a nice chunk of money to two differant brokers and told them I wanted to see who could make me the most money. How long should I give them and how much differance before pulling the money from the low man? Looking for ideas. Thanks Jim

Question...did either broker sit with you and discuss your short, intermediate and long term goals? Do these brokers have discretionary authority on your accounts (they can trade on your behalf)? Do you have a sufficient 'cash stash' to last you 6-12 months? Are you trying to day trade?

As a person who does this for a living (non-commissioned by the way) these are the types of questions that must be asked. What the money is invested in is not as important as people think. What's most important is what my plans for the money is and when I expect to use it. If I'm extremely risk tolerant and like to buy penny stocks....I better be prepared to lose every cent.

If I'm not in that class....than my portfolio should reflect my personal tolerance for risk...not the gut feeling of some young broker. For many people....buying individual stocks isn't worth it and using a low expense, no-load mutual fund may serve you fine. It really depends on how much time and effort you want to put into this.

If you need some level of stock or mutual fund advice, some companies that come to mind are Vanguard and USAA. I trust both of these groups and they are consistantly rated very high.

Good luck on your choices!

[Bob King]

A friend of mine invested money through a broker and lost most of it. When he commented on the loss the broker said "Well, I made money and my boss made money, two out of three ain't bad"
May be made up, but that is what I was told.
Bob

[steelheadbluesman]

I was a commissioned stock and commodities broker with Paine Webber in the 1970's, and I've been an avid stock investor ever since. My firm had a very respected name with over 100 offices nationwide. Still, after seeing the wild and greedy underbelly of wall street firms up close and personal, I've invested over the last 40 years ON MY OWN with discount brokers. Commissioned brokers make their decisions with an INCENTIVE to earn money for themselves and their firm, not you. It is an extremely competitive and fickle business, and they know that you, John Q. Customer, will typically move your money somewhere else in "X" number of years, (especially if THEY underperform, which they almost certainly will) so they'll churn you for commissions, especially if you are not a huge account.

I have two caveats, and then a couple of suggestions about your methodology: First, if you are a small to moderate account, under 500 thousand, go with a "less-commission-driven house", the so-called discount brokers (TDAmeritrade, E-Trade, Fidelity, USAA and so on.) They have excellent research, lots of idea generating programs and HIGHLY TRAINED PEOPLE who are paid a SALARY for helping you make very important investment decisions. And, contrary to public belief, you can hook up with your own personal broker. They make NOTHING by trying to sell you a particular investment. My second caveat is to NEVER give any commission-driven broker written "authority" over your account, enabling them to execute trades without your prior approval on each and every trade.

NOW, on the other hand, if you have a LOT of money, then by all means set up a contest and let the BigBoys have at it (like Merrill Lynch, B of A Wealth Mgmt, etc. Because, if you're a big account, they'll treat you pretty good (meaning they'll abuse you a little less), because the income stream you can generate over the years is worth it to them. Still, if you give them written "authority" to trade in your accounts, watch your money very carefully. This is just some food for thought. These days, less than 20 persent of market transactions are from individual accounts, all the rest by institutions and hedge funds using highly technical pre-programmed order entries. It's a scary world in the canyons of Wall and Broad Streets.

The answer to your question is that YOU will know when one is performing better, and YOU will know when to swing MORE money to the winner, based on your own sense of fairness. The comparison will be readily apparent to you. Anyone else's answer would be arbitrary. The reason I say swing MORE money to the winner rather than ALL (as you suggest in your OP), is that if you pull all your money from the low man, where is the incentive for the high man to keep performing? And against what measure or comparison? The leader would then have all your marbles and no competition to fear! Hell, the low man might be the clear winner next quarter, and for the next four quarters, but you sacked him. Better leave some dollars with the second place guy or place it with another competing broker, else you've lost the advantage of competition. Why not place your funds with 6 brokers and then move it around every 4 to 6 months, if there is a clear performance advantage, always leaving half the original amount with the losers, so they're still in the game and have money with which to perform? And I think I would use the S&P 500 or the Dow as the gauge, then hire and fire brokers as they compare to the index. Okay, enough. Have fun. Just some of my thoughts. Best of luck!

[Rudolph]

Good info thanks. I have over half a million with each broker, they do not have total free will to do anything they want. I have more myself with TDAmeritrade most of it I have in high dividend stock and funds. I did a lot of stock trading the last three years 2008 broke even, 2009 made 18%, 2010 made 21%. Now I want to spend more time traveling and not worring about keeping track of the market. I told the brokers I don't mind taking some risk. I farmed all my life so I know risk. I told them after six months they are to put 5% (divided monthly) into my account and expect my account to grow some. This will be more than we need to live on but will give them something to work toward. I do have experience in some losses that is just part of the risk process. Everything is checked 2 or 3 times a week just to keep track of what they are doing. Farming does not give you a pension so you need to protect your investments. Jim

[diandtom]

My last broker was making more than us off our stocks. I moved to Fidelity years ago and been happy ever since.

[steelheadbluesman]

Reminds me of the old joke: How do you make a small fortune on Wall Street? Start with a big one!

[djhinds]

My dad gave advice, he said to never invest my own money with anybody that has BROKE in their title........

Dave
2004 Monaco Signature
2011 Honda CR-V toad

[TW]

Quote:

Originally Posted by djhinds My dad gave advice, he said to never invest my own money with anybody that has BROKE in their title........ Dave 2004 Monaco Signature 2011 Honda CR-V toad

Thats the ONLY way to go. My money stays with us..... No 'BROKE'r
gets a hand on it! No way.

[RickO]

[QUOTE=SpursMVP;762645]Question...did either broker sit with you and discuss your short, intermediate and long term goals? QUOTE]

That was my thought as well. Not sure how a broker would go about approaching this "challenge" without knowing these things.

We're a little different than most of the posts so far. When I retired I signed on with a Certified Senior Financial Planner and couldn't be happier with the results so far. I don't focus on the fees but rather on the "net of fees" results and we're very pleased.

Rick

[steelheadbluesman]

Quote:

Originally Posted by djhinds My dad gave advice, he said to never invest my own money with anybody that has BROKE in their title.....

I've heard a lot of market quips, this one is great!

[GaryKD]

Hi Rudolph,
Since you are into 7 digits, consider diversifying your $s. Go with firms that specialize in the investment you want the $s to be in. Bonds, Equities, Natural Resources, Precious Metals, Utilities, Domestic, International, etc. Compare their results with what that market is doing for a rolling 12 months. Your firm(s) should be at or beating the average in that type of investment.