Buying and Selling Securities

One of the key features that may occur while investing in financial markets is that sometimes investors overlook the essential factors they should consider while buying or selling different securities. With the introduction of lower commission rates, growing competition, decreasing regulatory curbs and increasing public interest in investing, the financial markets are flourishing like never before. Today, there are a number of avenues from where one can buy and sell stocks, bonds, mutual funds, and many other financial instruments.

All these avenues can be categorized into four main heads. They are

(i) Brokerage houses

(ii) Directly from the companies,

(iii) Banks

(iv) Individual investors.

One of the most common and easiest ways of buying and selling stocks, mutual funds and bonds is through a brokerage house. These companies typically require an investor/trader to open an account with them and deposit funds as an act of good faith and for the security provided in the purchase of stocks. Brokerage houses are popular because they provide all support in research and selection of stocks. This allows investors to just focus on when and what to buy or sell. They look after things like completing the paperwork involved in transferring the ownership of stock and ensuring receipts of dividend payments. Some of the leading global brokerage houses providing various kinds of financial services to big institutional and retail investors are Citigroup, Merrill Lynch, Morgan Stanley, J.P.Morgan, Goldman Sachs, Lehman Brothers, UBS, etc. However, other avenues from where one can acquire financial securities or get exposure to financial market in today’s context are diminishing in importance; like, banks are opening their own brokerage houses or a separate division in the bank itself