Be wary of a broker who wants to liquidate your blue chip holdings or steers clear of blue chip stocks in order to invest in lesser-known securities.
No reputable broker would recommend that a customer liquidate much or all of his existing portfolio of high-quality stocks, bonds, and mutual funds to buy lesser-known securities.
Likewise no reputable stockbroker would recommend that a client concentrate his investments in one stock or in a group of lesser-known securities. There is more investor and professional analyst interest in Lucent Corporation than in XYZ Corporation even if XYZ really does have the exciting, new product that the broker is telling you about.
The more investor and analyst interest there is in a security, the less the risk that that security is being manipulated or the less risk that the stock price has been run up to allow insiders to dump shares.
Be particularly wary if the stockbroker is trying to sell you lesser-known securities in which his firm makes a market.
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