| Buying stocks is one of the most over-hyped | | | | 10. - What's the catch? You should do your |
| activities in the business world today. Online stock | | | | homework before choosing a broker. One reason I |
| brokers allow you to bridge the gap between Wall | | | | like Scottrade is that they don't seem to have any, |
| Street and Main Street, so you can trade stocks in | | | | as all trades are just $7 forever. Other services have |
| the blink of an eye with just the click of a button. | | | | intro-deals that expire after the first month. For |
| I've answered questions about "how to buy a stock" | | | | example, E-Trade has a free 100 trades deal, but |
| before, so let's explore your options as far as online | | | | when you read into it... it only lasts for the first 30 |
| brokers go. There are many factors that should guide | | | | days. Other brokers will hike commission fees |
| your decision, here are what I feel to be the top | | | | periodically, or charge you quarterly account fees for |
| factors in deciding which stock broker is right for you: | | | | holding your cash. Finding all of the hidden terms is |
| | | | important, and can make or break your financing. |
| 1. Customer Satisfaction | | | | Now that we know about what we are looking for in |
| 2. - This is probably the most important aspect of | | | | a broker, it's time to see what stock brokers are out |
| any online broker in my opinion. How do people feel | | | | there for you to use, and how the stack up in these |
| about the service they are getting? This includes a | | | | five categories that I have outlined for you to apply |
| sense of security that comes with the larger brokers | | | | when deciding where to house your cash. Introducing |
| with hundreds of thousands of customers and local | | | | the Net Fool's 2008 Value Rankings for Online Stock |
| branches you can visit for support. Does your broker | | | | Broker |
| assign an individual broker to every account, or are | | | | |
| you doing it alone? On top of support features, | | | | 1. E-Trade |
| people will generally report back on how fast | | | | 2. Scottrade |
| transactions are made, which can be important to | | | | 3. TradeKing |
| getting the best price on your trades. | | | | 4. Charles Schwab |
| 3. Commission Fees | | | | 5. Interactive Brokers' |
| 4. - For me, this is probably even more important | | | | 6. TD Ameritrade |
| than satisfaction since I have less money at stake | | | | 7. Tradestation Securities |
| than the average investor. In short, brokers charge | | | | 8. Options Xpress |
| commissions on every trade you make to handle the | | | | 9. Muriel Seibert |
| transaction costs... how expensive are these? These | | | | 10. Fidelity |
| costs can be anywhere from $1 to $20 per trade, so | | | | 11. Zecco |
| this can be a huge factor... or a non-factor... all | | | | 12. Sharebuilder |
| depending on how much money you have in your | | | | These rankings are based on my own experience, |
| account. | | | | shared reviews from sources such as Barron's, |
| 5. Minimum Deposit | | | | Standard & Poor's, Forbes, Kiplinger and MSN |
| 6. - Again, to some this is a non-factor, but it is | | | | Money. Please take note that the rankings are |
| definitely something you should consider if you are an | | | | weighted toward lower-commission / lower-deposit |
| average investor. Do you want that discount broker | | | | "value" brokers, although all satisfaction and features |
| that has a minimum deposit of just $500... or are you | | | | are accurately represented. |
| going to look for the full-service kings that require | | | | Finding the right stock broker can be a real judgment |
| upwards of $10,000 minimum in your account to start | | | | call, and all of the "top 12" options are very good |
| off. | | | | services. While I feel that you would be best off |
| 7. Research / Features | | | | with an E-Trade or Scottrade account, holding an |
| 8. - Research is very important for every broker. | | | | account with ShareBuilder or Zecco wouldn't be your |
| Some of these fly-by-night brokers offer you nothing | | | | worst option. If you have a lot of investing money, |
| in the way of research. Most of the more established | | | | you should focus more on features and satisfaction, |
| guys will give you free reports from Standard & | | | | so a brokerage like Schwab, Fidelity or Muriel Siebert |
| Poor's, Goldman Sachs, Reuters and other places that | | | | to fit your needs if commissions really aren't a factor |
| can help you make educated trades. On top of | | | | for you. |
| research, features like live stock tickers, after-market | | | | I hope that you all found this guide useful. Online |
| trading and even technical chart analysis should be | | | | discount brokers are a relatively new phenomenon, |
| important aspects of your broker. If you have the | | | | and have been improving day in and day out... making |
| tools to be successful, you are far more likely to | | | | it easier, cheaper and faster than ever to place |
| make money. | | | | trades and make money in the stock market. |
| 9. The "Catch" | | | | |