When you are investing your hard-earned money, it is important that all of the components are properly in place to generate returns for your portfolio.  Choosing a brokerage is an important part of your investment process, as the varying fees, services, and trading speeds can have a tremendous impact on your profitability.

There is a wide variety of brokerages available, and different ones are more suitable for various styles of investors.  Whether you are a more conservative investor or one who wants to take risks, it will take consideration to find the broker that is right for you and your investment personality.

Discover your investing style

To find a good broker, you need to understand your own investing style.  Answering the below questions accurately will help you choose a broker.  All of these questions can help you decide what type of investing personality that you have.

• How much advice do you want? – would you like professional financial help, or do you want to research opportunities yourself?  
• When you are investing, how long is your average holding period?  Are you a day trader, momentum trader, or long-term investor?
• Do you normally make small trades or large ones? 
• Do you like talking to a broker in person, or is email communication sufficient?
• Do you need instant trade execution? 

Which investing type are you?

There are essentially four types of investors, and chances are you fit into one of these categories.

Reliant investors want some financial help when they choose an investment.  They prefer a broker that will offer advice and assistance, particularly when they are still getting a feel for the market.  They are willing to pay more in commissions for this service from brokerages such as Charles Schwab or Merrill Lynch .  Many times, the brokers of reliant investors will also help with tax planning, long term planning, and asset allocation.

Retail investors or individual investors do not require special assistance or advice.  They prefer to do their own research, choose their own stocks, and place their own orders.  They want to trade quickly and for low commissions.  Many of the discount brokerages, such as Ameritrade and E*Trade serve the purpose of the individual investor well.

Short-term investors are traders, and they may hold an investment for months or just hours.  Short term trading is done by inventors who know the market well, and understand all the nuances of the game. They want access to the best information, to be able execute a trade quickly, and the ability to trade in a variety of markets.  Short term investors need very little from a broker.  They want to maximize profits from their trade; therefore, they are looking to obtain the best price possible, but they are not as fixated on it as a day trader.  Online brokerages, such as MB Trading , often work well for short term investors, as they offer low commissions and the tools that investors need to make decisions quickly.

Day traders also have plenty of experience in the market, and they hold onto stocks for even less time than a short-term trader.  They usually hold a stock for only minutes to hours, and nearly all of their trades are entered and closed in the course of one day.  Day traders need their trades to be made quickly, allowing them to take advantage of penny nuances.  Day traders also look for low commissions and would use brokers offering such.  In addition, day traders have to be able to access live quotes instantly, and therefore, market tracking systems such as Trade Station are often the most efficient for them.

The right broker can make all the difference in how successful you are in your investments.  For example, if you are a day trader, then a brokerage without instantaneous trades will be disastrous to your portfolio.  Or, if the brokerage has a minimum commission per trade that is prohibitively high, it will eat all of your day trading profits.    Taking the time to find a broker that suits your style and needs pays off significantly for your portfolio in both the short and long-term.