Newspaper article The Christian Science Monitor

In General, Stock Trades by Voice Mail Are a No-No

Newspaper article The Christian Science Monitor

In General, Stock Trades by Voice Mail Are a No-No

Article excerpt

Q: A stock I owned was downgraded and quickly lost value on a Friday afternoon. I called my broker to discuss the wisdom of selling before it declined further. He was out of town but left a message that I should call the company's 800 number and set a minimum. I called my broker again on Monday morning, leaving a message to sell if it went over a certain price. Later in the day, I found that the stock was sold at $1.75 over my minimum about 45 minutes after my call. I regard this as an unauthorized sale and wonder what recourse you could suggest. Name withheld, Bristol, R.I.

A: Security trades cannot generally be accepted via voice mail, says Robert O. Smith, a certified financial planner in Exton, Pa. In fact, it's normal to hear this reminder in voice mail messages at many firms.

When trading stocks, dramatic changes in prices can occur in short periods of time and it can be very important to be able to sell the stock quickly to avoid further loss or to lock in a gain. So you need access to someone, or some process, to be able to execute your trade when you want.

As Mr. Smith sees it, the bigger issue here is access to your broker. You may want to consider using other trading alternatives or ask your broker to provide a backup for you to place trades in case he or she isn't around when needed.

If you still feel cheated, read your brokerage account agreement carefully since it should outline the complaint options that you have. Usually, it's arbitration. You can also file a complaint with the National Association of Securities Dealers (www.nasd.com).

Q: We're frequently advised to include international investments in our portfolios. Some have reservations about investing overseas. Since many US firms have international operations, wouldn't investing in those provide some diversification? …

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