Feeling pressure? Ask broker these questions

October 21, 2007|By MarketWatch

NEW YORK -- Do you feel as though you're getting bulldozed by your broker? Remember: Stockbrokers aren't just financial professionals: They're salespeople, and they aren't above using heavy-handed sales tactics on occasion.

Here are some questions to ask about the stock being hawked:

How has that stock done lately? What are the reliable long-range earnings forecasts for the stock?

Is the stock undervalued? One sign that a stock could be a good buy is that its price is near the bottom of its trading range of the past few months.

What is the company's profit margin? Is it above the average for its industry?

What are the chances that the stock will go down instead of up in the short term?

How does this stock fit in with your strategy? Do you want long-term growth, high-dividend income or a quick killing?

Did your broker or an analyst do the research on the stock? How well did other stocks recommended by them perform?

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