Question

Jermaine gets a call from his broker. The broker recommends that Jermaine immediately buy a particular stock because the price will rise soon. He says Jermaine can either invest new money or sell off some of his other securities to raise cash. He says that if Jermaine purchases over $1,000 worth of the stock, there is no commission. Why does Jermaine suspect that his broker is giving bad advice?

Answer 1

Selling securities to raise the cash to pay for other securities is illegal.
The broker told Jermaine about a breakpoint to avoid paying a load.
The broker insisted on immediate actions, which is not how long-term investing works.
Brokers should not persuade clients to make trading decisions over the telephone.

Answer 2

@zaibali.qasmi