How Does Your Broker Rate?

Unless you’ve followed Jim Sinclair’s recommendation to get paper certificates for all the stocks you own, you probably still have some stocks through a broker. If the broker goes belly-up sure, SIPC will supposedly cover some of your losses. But, if that happens you may be frozen out of trades for weeks or months.

One way to rate your broker is to calculate the ratio of their total net capital divided by their minimum capital requirement. This gives you the broker’s Capital Multiple number and the higher, the better.

Here’s a list of some of the most popular brokers and their Capital Multiples, put together by Weiss Research.

Broker Ratings

Remember, you can also get a letter-grade rating (“A” through “E”) for your broker or insurance company from the same place you can rate your bank. See How to Rate Your Bank’s Safety .

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Gold & Silver Bandwagon Gets Another One

growthstockwireI’ve followed Jeff Clark’s writings in “The Growth Stock Wire” for a few years now. He’s a died-in-the-wool stock market guy and has a decent track record there. This Q&A is from his latest newsletter:

Reader asks: A few weeks ago, you were wildly bullish on gold and gold stocks. They’ve since dropped sharply and recovered a bit. What are your current thoughts on this sector?

You must own gold or silver. When central banks around the globe are printing money faster than Danielle Steel prints romance novels, your only hedge is to own gold or silver. I underestimated the need for liquidity, which caused institutions and investors to dump everything – including precious metals – in an effort to raise cash. But their selling does not negate the logic behind this trade.

“We could see additional selling pressure over the next week or two if the broad stock market takes a hit. But the current economic environment is hugely bullish for precious metals. And precious-metal stocks offer dramatic leverage on this trade.

“I’m not a typical gold bug who thinks gold can only go higher and if it doesn’t then it’s some sort of government conspiracy. I’ve often written bearish articles on gold when the price has extended further than logic dictates.

“The current economic environment, however, is bullish for gold and silver. The short term is up for grabs, but I can’t imagine a better trading idea for the intermediate and long term.”

◊◊◊◊ Now: Gold @ $735.00, Silver @ $9.96, USDX @ 86.29 ◊◊◊◊
◊◊◊◊ Now: DJIA 8,611.92