ARE YOU a person who wants to invest in stocks for the first time, or a seasoned investor dissatisfied with your broker's recent performance? In either case, you may choose between a full-service and a discount broker.
To find a qualified full-service broker who monitors your portfolio, ask friends or business associates whom they use. Interview several candidates. Ask how long they have been in the business. Have they been through "down" as well as "up" markets? Insist on seeing some clients' performance figures (with names deleted). Ask if they specialize in growth or income. And make sure they tell you the best time to phone them, and how often they will meet with you.
If you choose a discount broker, ask them what they charge for trades you execute and how their commissions compare with full-service brokers' fees. Do they offer electronic investing? If you're buying Nasdaq stocks, insist on seeing evidence that they buy lower than the asking price, and sell above the bid. Ask how many mutual funds they offer and at what cost, and how much personal service they provide.
When beginning with either a full-service or discount broker, start by investing a small amount of money. If the relationship pleases you, allow the account to grow. If not, start over with a new broker.
CHANGING JOBS? "Don't neglect your stock options when you leave an employer," says Kiplinger's Personal Adviser, adding, "You can take your incentive stock options when you leave but act quickly to preserve the most favorable treatment. If you exercise options within 90 days of your departure, you won't have to pay taxes on earnings until you sell the stock."
TEACHER'S PET: "Open an Education IRA shortly after your child is born. Assuming a 12 percent annual return, parents who open an Education IRA promptly and make maximum annual contributions will have over $31,000 to apply tax-free toward higher education expenses when the child reaches 18." (Consumers Digest.)
QUICKIES: For measuring your stock performance, note that the Dow Jones average was up 22.6 percent last year and rose 11.3 percent in this year's first quarter. April is historically an "up" Wall Street month, with the S&P 500 index rising an average of 1.3 percent over 47 years.
Pub Date: 4/03/98