Why I trust my Broker

Signs That It’s Time for a New Broker

Like it or not, if you’re putting your money in somebody else’s hands, you have the responsibility to read every line of your statements every month. People like Mr. Horn, who was a friend to many of his clients until he wasn’t, count on the fact that you won’t.

“I think the victims were picked because they weren’t paying attention to their accounts, because each and every trade was documented,” said Stephen Young, Wells Fargo’s outside counsel in this case, according to a court transcript of a sentencing hearing in January.


If you happen to run into an adviser prone to bragging, trading and disco parties at country clubs, check yourself to see whether you may have been just a bit too complacent.
Comment: I have a broker story about how my broker maximized her commissions at my expense. I dropped her. I'm not a broker but I do my own trades on Wells Trade. If one has a certain amount of assets Wells Trade provides 100 free trades a year. With 3 IRA's and a brokerage account I get 400 trades a year. I've never come close to using them. Do I trust myself? We'll I've made some mistakes (see SVU). My (really "our" as Kathee and decide together) strategy:

  • Dividend stocks
  • Mainly Large Cap  . An example of an exception would be  Rocky Mountain Chocolate Factory Inc.
  • Diversification. Normally no more than 100 shares of any one stock (with some exceptions)
  • P/E ratio of under 20
  • An example of one that meets the above criteria would be Coca-Cola
  • A company that I know something about. Examples (all where I have relatives working): Seagate (son), 3M (daughter), P&G (brother-in-law), Accenture (niece). USBank (friend from church)
  • Companies with a broad customer base: General Mills, Kraft, etc. (also meets the "things people eat")
  • Not tobacco. But I do have some other vice companies (people drink this stuff even when the economy goes South)
  • Technology: Some have done well like IBM ... some not so like Intel and Microsoft
  • Utilities like Centerpoint and Xcel (people have to heat and cool their homes)
  • I don't need to take significant risk .. I'm a slow plodding investor. Recently we bought Nestl over a period of months

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