Home > Finance and Stocks > Your broker only loves you if you trade

Your broker only loves you if you trade

One secret most people don’t know although many may think obvious is that wall street firms WANT YOU TO BUY AND SELL. This is how they make money. Upgrade one day and downgrade another and repeat. The more times they can break you away from your shares and get you back in the more they make.

My broker hates me. I don’t trade. I buy and sit on positions for 5 years to 20 plus. He cannot make any money on me. Most of my trading is done at TD Ameritrade for $10. Even in that model they WANT YOU TO TRADE. They make money on order flow and the trade commission. Idle movement is the death of Wall Street firms.

So they make sure you flip from greed to panic and back again to create trading velocity. This is why they have analysts issuing upgrades and downgrades.

For example, look at all the downgrades and churning over the last 5 years you would have done listening to analysts and firms dumping and pumping Chipotle Mexican Grill (Nasdaq: CMG)I bought at 47 and held through it all. Didn’t pay the IRS a dime in taxes nor my broker. They hate me. If you are selling and buying or trying to time gyrations good luck to you and just know that your broker loves you.

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