Brokers advising hold - why?

[awg]

Myself and a couple of friends have recently consulted our brokers, with a view to some selling. Different broker/organisations, same opinion "Dont sell".

I am curious about this. Technical indicators are rather bearish. The brokers remain bullish. I would have thought they would be happy to churn as many sells OR buys as we want, thus earning commission.


Our cynical minds, wonder if there is any ulterior motive for them to recommend a client not to sell. I hope that I am not implying that the brokers are not acting in the clients best interest, we simply want to enquire if there would be some reason such as either; any sort of residual income, or broker prestige related to the size of their accounts under admin, or any other reason unknown to me.

My opinion was that the vast majority of their income came from commssions.

Of course my financial advisor has recommended holding, same for my sisters.

For what its worth, we all did some selling, me partially in order to move some more to my SMSF, but also to cash up a bit.

AS I have mentioned before, I joined ASF to learn more of a technical trading method, and as tech indicators are for at least some selling, that is what I have been mainly doing. I have bought into agricultural stocks and gold most recently.

 

[treefrog]

Myself and a couple of friends have recently consulted our brokers, with a view to some selling. Different broker/organisations, same opinion "Dont sell".

I am curious about this. Technical indicators are rather bearish. The brokers remain bullish. I would have thought they would be happy to churn as many sells OR buys as we want, thus earning commission.


Our cynical minds, wonder if there is any ulterior motive for them to recommend a client not to sell. I hope that I am not implying that the brokers are not acting in the clients best interest, we simply want to enquire if there would be some reason such as either; any sort of residual income, or broker prestige related to the size of their accounts under admin, or any other reason unknown to me.

My opinion was that the vast majority of their income came from commssions.

Of course my financial advisor has recommended holding, same for my sisters.

For what its worth, we all did some selling, me partially in order to move some more to my SMSF, but also to cash up a bit.

AS I have mentioned before, I joined ASF to learn more of a technical trading method, and as tech indicators are for at least some selling, that is what I have been mainly doing. I have bought into agricultural stocks and gold most recently.

brokers don't want to upset their big clients (publically listed co's) so they have a biased recco scale of

sell, hold, accumulate, buy, and strong buy

note the last three all mean buy

so decode it and u get a little closer to what they mean

scrap the sell recco
the rest become hold=sell, accumulate=hold, buy and strong buy mean buy on dips

NEVER EVER listen to a broker or you will be

 

[ice]

awg,

You may be being a tad too cynical. I am at a bit of a loss to understand why you use a broker in the first place if you doubt he/she is acting in your best interests.

It remind me of the old joke about the bloke who gets a puncture on a lonely country road in the middle of the night.
He opens the boot and realises he hasn't a jack. Despairing, he looks around and sees a farmhouse a little way up the road.
They'll have a jack he can borrow.
So he walks the couple of hundred metres to the farmhouse and bangs on the door. There's no reaction at first then a light comes on in the house, and he's standing there waiting, and he's thinking, this bloke isn't going to be happy about being woken in the middle of the night. He's probably going to say, "What the hell do you want? Do you know what time it is? I have to be up at 5. And you've waken the baby and frightened the wife. A jack? What sort of idiot drives out into the country without a jack in the boot?"
By this time he's in a lather of sweat, but just then the door opens and there's a bleary-eyed bloke in jimjams standing there. Before he can utter a word the motorist snarls at him,
"ALRIGHT THEN IF THAT'S YOUR ATTITUDE YOU CAN STICK YOUR BLOODY JACK."


ice

 

[Garpal Gumnut]

awg,

You may be being a tad too cynical. I am at a bit of a loss to understand why you use a broker in the first place if you doubt he/she is acting in your best interests.

Its not uncommon for brokers to give differing advice to different clients. Rene Rivkin told his clients to buy shares he was actually selling unbeknowenst to them in to the market.

Cynical?

Naaah. !

gg

 

[CATAPILLAR]

When I first started trading, I used a broker, and your right, I became broker.
Since then I decided the decission I make is my own undoing or profit I'm much happier learning from my own mistakes. Brokers to me are too one eyed.
It's like asking your bank for stock market advice.
CATAPILLAR

 

[Pager]

Its always puzzled me why you very rarely see the big brokers issue Sell recommendations particularly on big stocks

To me a stock is either buy or a sell but they have a whole range of terms, reduce, accumulate, hold etc etc.

As someone else has pointed out maybe this is so as not too upset some of these company's who generate far greater income for them than your retail client.

If your going to invest your hard earned $, it really is essential you do your own homework irrespective of who your broker is, full service or discount, at the end of the day its your money and if you lose it your broker wont suffer even a fraction of what you lose aside from commissions he may no longer get.

 

[Prospector]

Brokers have a lot of competing agendas. You have to know whether you are on the top of their list, or their bottom. That should determine your response to their advice.