Thursday, May 30, 2024

3 Stockbroking Stats and What you Can Learn from Them

While some may suggest that the practice of stockbroking has been devalued in the digital age, this is largely a misconception.

After all, the demand for brokering services remains largely today than ever before, with stockbroking firms having simply diversified and shifted their focus increasingly online in recent times. Not only this, but reputable wealth management firms like WH Ireland have also moved to completely restructure their bonus pools to improve efficiencies and industry perception, paying brokers out of record profits rather than turnover.

With a fascinating history and an even more intriguing future, stockbroking is also responsible for some truly staggering facts and stories. Here are some of the most striking and a look at what we can learn from them.

Attention to Detail is Critical

WH Ireland and firms of this type offer clients access to a huge range of assets in the modern age, and this is reflective of the fact that we’ve seen a significant rise in the number of derivatives available to investors in recent times.

Not all of these assets have been created equal, of course, which is why attention to detail and understanding are such key attributes when trading the modern financial markets.

This was borne out by an infamous incident in 2005, when an inexperienced trader at a Japanese bank tried to sell 1 share of high profile J-Com stock for 640,000 yen. However, he accidentally sold 640,000 shares for 1 Yen each, which represented the equivalent of selling $3 billion worth of stock for the price of $5,000.

While the sheer magnitude of this error is unusual, it underlines the importance of focus as a stockbroker and the need for investors to comprehend the detail of each market that they choose to operate in.

Small, Future Changes can have a Big Impact on Stock Value

Stocks can experience peaks and troughs, and this is why spread betting (which enables investors to trade shares without assuming ownership and potentially profit in a depreciating market) has become so popular in recent times.

However you choose to invest in company shares, it’s important that you understand the performance of the businesses that they belong to and recognise their potential for future growth. This will may enable you to capture stocks that have fallen in value but are capable of significant growth in the future.

Take Domino’s Pizza, for example, who saw their stock plummet to record lows in 2009. By revitalising the brand and making progressive changes to its pizza recipes, however, the firm rebounded and saw its stock grow by an incredible 233% in just 12 months.

Stockbroking Remains a Potentially Lucrative Career Option

History is full of people who’ve made considerable sums of money through stockbroking and financial trading, but few embody the potential in this market quite like Japanese day trader Takashi Kotegawa.

Having started out as a raw, 21-year old, Kotegawa entered the stock market with $13,600 to his name, before commencing a high volume trading strategy that sought to profit from volatility in the market.

Incredibly, he turned his starting capital into a staggering $156 million in just eight years, while reportedly consuming a diet of ramen noodles in order to avoid hefty meals and remain alert!

This highlights just how lucrative a career in stockbroking can be, particularly if you’re dedicated, knowledgeable and capable of applying determinism when implementing your strategy.

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