Website design By BotEap.comBuying stocks is one of the most overrated activities in today’s business world. Online stock brokers allow you to bridge the gap between Wall Street and Main Street, so you can trade stocks in the blink of an eye with the click of a button.
Website design By BotEap.comI’ve answered “how to buy a stock” questions before, so let’s explore your options when it comes to online brokers. There are many factors that should guide your decision, here are what I think are the main factors in deciding which broker is right for you:
- customer satisfaction
- In my opinion, this is probably the most important aspect of any online broker. How do people feel about the service they are receiving? This includes a sense of security that comes with the largest brokers with millions of thousands of clients and local branches that you can visit for assistance. Does your broker assign an individual broker to each account or does it go it alone? In addition to support functions, people will usually report on how quickly transactions are completed, which can be important in getting the best price on your trades.
- fee commission
- For me, this is probably even more important than satisfaction, as I have less money at stake than the average investor. In short, brokers charge commissions on every trade you make to handle transaction costs… How expensive are these? These costs can range from $1 to $20 per trade, so it can be a factor…or not a factor…all depending on how much money you have in your account.
- Minimum deposit
- Again, for some this is not a factor, but it is definitely something to consider if you are an average investor. Do you want that discount broker that has a minimum deposit of just $500…or are you going to go for the full service kings that require a minimum of over $10,000 in your account to get started?
- Research / Characteristics
- Research is very important for every broker. Some of these overnight brokers offer you nothing in the way of research. Most of the more established guys will give you free reports from Standard & Poor’s, Goldman Sachs, Reuters and other places that can help you make informed trades. In addition to research, features like live stock tickers, aftermarket trading, and even technical chart analysis should be important aspects of your broker. If he has the tools to be successful, he is much more likely to make money.
- The capture”
- What’s the trick? You should do your homework before choosing a broker. One of the reasons I like Scottrade is that they don’t seem to have any since all transactions are only $7 forever. Other services have introductory offers that expire after the first month. For example, E-Trade has a free offer of 100 trades, but when you read it… it only lasts for the first 30 days. Other brokers will increase commission rates periodically or charge you quarterly account fees for holding your cash. Finding all the hidden terms is important and can make or break your financing.
Website design By BotEap.com Now that we know what we’re looking for in a broker, it’s time to see which brokers are out there for you to use and how they compare in these five categories I’ve outlined for you to apply when deciding where to house your cash. Introducing Net Fool’s 2008 Value Rankings for Online Stock Brokers
- electronic commerce
- scottrade
- king of trade
- charles schwab
- interactive corridors
- TD Ameritrade
- Trading Station Values
- express options
- Muriel Seibert
- Fidelity
- Zecco
- action constructor
Website design By BotEap.comThese ratings are based on my own experience, shared reviews from sources like Barron’s, Standard & Poor’s, Forbes, Kiplinger, and MSN Money. Please note that the rankings are skewed towards the lower commission/lower deposit “value” brokers, although all satisfaction and features are accurately represented.
Website design By BotEap.comFinding the right broker can be a real judgment call, and all of the “top 12” options are great services. While I think you would be better off with an E-Trade or Scottrade account, having an account with ShareBuilder or Zecco would not be your worst option. If you have a lot of money to invest, you need to focus more on features and satisfaction, so a brokerage like Schwab, Fidelity, or Muriel Siebert suits your needs if commissions really aren’t a factor for you.
Website design By BotEap.comI hope you all found this guide useful. Online discount brokers are a relatively new phenomenon and have been getting better day by day… making it easier, cheaper and faster than ever to trade and make money in the stock market.
