Buying stocks is one of the most overrated activities in business today. Online stockbrokers allow you to bridge the gap between Wall Street and Main Street, allowing you to trade stocks in a snap with just one click.
I’ve already answered questions about “buying a stock,” 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 believe to be the most important factors in deciding which stockbroker is right for you:
- customer satisfaction
- This is probably the most important aspect of any online broker in my opinion. How do people feel about the service they receive? This includes a sense of security that comes with the larger brokers with hundreds of thousands of clients and local offices you can visit for support. Does your broker assign each account to an individual broker or do you do it alone? In addition to the support features, people will generally report how fast transactions are made, which can be important in getting the best price on your trades.
- commission fees
- To me, that’s probably even more important than satisfaction since I have less money at stake than the average investor. In short, brokers charge commissions on every trade you make to cover transaction costs…how much are they? These costs can range from $1 to $20 per trade, so this can be a big factor…or not a factor…all depending on how much money you have in your account.
- minimum deposit
- Again, this isn’t a factor for some, but it’s definitely something to consider if you’re an average investor. Do you want that discount broker that has a minimum deposit of just $500…or are you looking for the full service kings that need at least $10,000 in your account to start.
- Research / Features
- Research is very important for any broker. Some of these fly-by-night brokers do not offer you any research facilities whatsoever. Most of the more established types will give you free reports from Standard & Poor’s, Goldman Sachs, Reuters, and other places that can help you make informed trades. Along with research, features like live stock tickers, after-market trading, and even technical chart analysis should be important aspects of your broker. If you have the tools to be successful, you are much more likely to make money.
- The catch”
- What’s the catch? You should do your homework before choosing a broker. One reason I like Scottrade is that they don’t seem to have any since all trades are only $7 forever. Other services have introductory offers that expire after the first month. For example, E-Trade has a free 100 trades deal but if you sign up it only lasts the first 30 days. Other brokers regularly increase commission fees or charge you quarterly account fees for storing your cash. Finding all the hidden terms is important and can make or break your funding.
Now that we know what to look for in a broker, it’s time to take a look at what stockbrokers are out there for you and how they stack up in these five categories that I’ve outlined to help you decide where you can apply apply house your cash. Presenting the 2008 Net Fool’s Value Rankings for online stockbrokers
- e-commerce
- scottrade
- TradeKing
- Karl Schwab
- Interactive Brokers
- TD Ameritrade
- Tradestation Securities
- Options Xpress
- Muriel Seibert
- loyalty
- zecco
- sharebuilder
These rankings are based on my own experiences, combined reviews from sources such as Barron’s, Standard & Poor’s, Forbes, Kiplinger, and MSN Money. Please note that although all satisfaction and features are accurately represented, the rankings are weighted towards brokers with lower commissions/lower deposit value.
Finding the right stockbroker can be a real decision and any “Top 12” options are very good services. While I think you would be best off with an E-Trade or Scottrade account, a ShareBuilder or Zecco account would not be your worst option. If you invest a lot of money you should focus more on features and satisfaction, so a broker like Schwab, Fidelity or Muriel Siebert to cater to your needs if commissions really aren’t a factor for you.
I hope you all found this guide useful. Online discount brokers are a relatively new phenomenon and have been improving by the day…making it easier, cheaper and faster than ever to place trades and make money in the stock market.
Thanks to Jim R Regan | #Online #Stock #Brokers #Finding #Stock #Broker
