Welcome to Professor Savings.com
We teach finance basics.
Hi, I’m your host today Rayfil Wong.
Today we are giving you three warning signs from possible evil brokers.
#1 Fake dividend opportunities. So watch out and beware if brokers ask you to buy stocks let say in lemon for upcoming phone release because they will distribute dividends to you.
Dividends are profits from the corporationgiven back to share holders but the reality is that unless you help the stock for a certain period of time you will not quality for getting dividends.
After all, your broker makes money off transactions. Your broker may suggest you to for instance, if you invest $20,000 into the account your broker may have a 3% commission.
While investing just $18,000 the broker only makes 5% so the broker may entice you to invest more for his benefit.
Honest brokers will let you know the exact breakpoint and be transparent.
#3 trading just for commission
Certain brokers make money from each trade so they might ask you to buy certain stocksjust for commission.
Your broker may ask you to buy some shares and sell it just for the intention to make money off the trade. after all, they make money from a portion of the commission.
If you catch your broker doing any of these evil things fire them and find a new one ASAP.
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Professor Savings signing off.