Buying stocks is one of the most widely advertised activities in today’s business world. Online stockbrokers allow you to close the gap between Wall Street and Main Street, so you can trade stocks in the blink of an eye with just one button click.
I’ve already answered the “how to buy stock” questions, so let’s explore your options as far as online brokers go. There are several factors that will guide your decision, and I think the top factors in deciding which stockbroker is right for you are:
This is probably the most important aspect of any online broker in my opinion. How do people feel about the service they are getting? It has a sense of security that comes with big brokers with hundreds of thousands of customers and local branches that you can visit for support. Does your broker assign a personal broker to each account or do you do it alone? Above the support features, people usually report on how fast the important transactions take in getting the best price in your trades.
For me, this is more important than satisfaction, because I have less money than the average investor. In short, brokers charge commissions on every business you do to manage transaction costs … How expensive are these? These costs can range anywhere from $ 1 to $ 20 per trade, so it can be a huge factor … or non-factorial … it all depends on how much money you have in your account.
Again, for some it is non-factor, but it’s definitely something to consider if you are an average investor. Do you want a discount broker with at least a $ 500 deposit … or are you looking for a full – service king who needs at least $ 10,000 in your account to get started?
Research / Features
Research is very important for every broker. Some of these fly-by-night brokers offer you nothing in the way of research. Most of the more settled guys will give you free reports from Standard & Poor’s, Goldman Sachs, Reuters and other places that will help you do educated business. On top of research, features like live stock tickers, after-market trading and technical chart analysis should be important to your broker. If you have the tools to succeed, you are more likely to make money.
What’s the catch? You should do your homework before choosing a broker. One reason I like Scottrade is that since all trades are always only $ 7, they don’t seem to have any. Other services have introductory agreements that expire after the first month. For example, E-Trade has a free deal of 100 trades, but when you read it … it only lasts for the first 30 days. Other brokers may increase commission fees from time to time or charge you quarterly account fees for having your cash. It is important to find all the hidden terms and your financing can be done or broken.
Now that we know what we are looking for in a broker, it’s time to look at what stock brokers are there for you to use and how stock brokers are in these five categories and I have explained where you should apply Keep your cash. Net Fools Introduces 2008 Value Rankings for Online Stock Broker
These rankings are based on my own experience, reviews shared from sources such as the Barons, Standard & Poor’s, Forbes, Kiplinger and MSN Money. Please note that the rankings are weighted towards low-commission / low-deposit “value” brokers, although all satisfaction and features are strictly indicated.
Finding the right stock broker can be a real judgment call and all the “top 12” options are very good services. I think you would be better off with an E-Trade or Scotter account, having an account with ShareBuilder or Zecco is not your worst choice. If you have more investment money, you should focus more on features and satisfaction, so if commissions are not really a factor for you then brokerage brokers like Schwab, Fidelity or Muriel Siebert to suit your needs.
I hope all of you find this guide useful. Online discount brokers are a relatively new phenomenon, and are evolving day by day … making it easier, cheaper and easier to make money on the stock market than ever before.