How to Choose a suitable stock broker
Below will be a breakdown of how you choose a suitable stockbroker in Malaysia:
1. Identifying Your Needs
Since you have set a mind into investing in stocks, you need to be clear on whether you would like to invest in Malaysian stocks or overseas stocks. It is because most Malaysian trading platforms do not offer the option to trade foreign stocks (like the US market), and you will need to use a separate trading platform to do so.
Why Malaysia Stocks?
- Tax. You do not need to pay capital gain tax for investing in Malaysian shares. Hence, all profits are yours to keep.
- Politics and economics. As Malaysians, we can easily understand political or economic changes in the country. As the saying goes, invest in things you know the most.
- Accessibility. Malaysians can directly invest in Bursa Malaysia by signing up for a local stockbroker. Fees are generally lower as well when investing locally.
Why US stocks?
- Diversification. When investing in US stocks, you generally increase your global exposure as big companies operate on a worldwide scale.
- Currency. When owning US stocks, your stock value pegged to the dollar known for its stability.
- Liquidity. The US market has the largest stock market globally, proving the high liquidity of exchange, which is why it is the most popular country to invest in the world.
2. Regulation
When selecting a broker, you want to have one that gives you peace of mind during trades. When selecting a Malaysia brokerage, make sure it’s regulated by Securities Commission Malaysia (SC) or Bank Negara Malaysia (BNM). If it’s an overseas stockbroker, ensure that it’s regulated by governing bodies such as the Financial Conduct Authority (FCA).
Even though a stockbroker might offer you many benefits, but if financial governing bodies do not authorise it, it is still risky. There were cases of fraud happening or withdrawal unable to proceed.
3. Platform
Ensure that the trading platform has most functionalities that a stockbroker should have like charts, fundamental data, ratios, and more.
It is essential that the user experience of the platform is user friendly, with the addition of a mobile version would be plus as it will be more convenient for you to monitor your stock performances.
Educational sections of the platform will be essential for investors, whether seasoned or new, as daily produced market information will be helpful in your stock analysis.
4. Customer Support
The website needs to have tutorials for newbies and a FAQ section.
An efficient customer support line is also required to solve crucial issues. Hence, be sure to check the reviews on their supports as well.
Conclusion
It is essential to select a good stockbroker; it doesn’t matter if you invest in the Malaysia or US stock market. Once you’ve chosen a suitable broker, remember to hone your skills and knowledge so that your efforts do not go to waste. And as always, happy trading!
