Online Investment Brokers

You've decided to start investing and are ready to open a brokerage account.  Which one is right for you?

As long as you stick with a reputable broker, you can't go too far wrong.  But some are better suited to your needs and situation than others.  If you're interested in using a particular online investment broker, investigate them thoroughly before giving them any money.  Find out if they're FDIC insured, and what the limits are.  Is their website secure?  


FACTORS TO CONSIDER
IN CHOOSING AN ONLINE BROKER


Reputation:  read online reviews and check to see if the broker has any litigation against them.

Security:  what security measures are in place to limit access to your account and your personal information?

Transaction Costs and Other Fees:  fees eat away at your earnings, so watch these closely.

Minimum Requirements:  do you have enough money set aside to open an account?  Some brokers have no minimum requirements, others may require a nominal amount, still others ask for thousands of dollars just to get started.

Fund Availability:  you want access to a wide variety of stocks, ETFs and mutual funds.  Some of the less-expensive brokerages offer only a limited range of securities in which to invest.  Having more investment options is often worth higher fees.

Accessibility:  look for an online investment broker that makes depositing and withdrawing funds as painless as possible.

Ease of Use:  placing orders, researching investments, navigating through the site -- all these things should be smooth and intuitive to operate, allowing you to focus on your investments, and not on the frustration of figuring out a site that isn't user friendly.


ONLINE BROKERS

Here is a list of discount investment brokers that have built up a reputation online (in no particular order):

Charles Schwab

E*Trade

Scottrade

Fidelity Investments

TD Ameritrade

Merrill Edge

Interactive Brokers

TradeStation

Firstrade

TradeKing

Capital One Investing

Lightspeed Trading

SogoTrade


The easiest way to see what each discount broker has to offer is to go to a site that offers a comparison tool, such as StockBrokers.com.   Here you can see at a glance what their fees are, fund availability, minimum required, etc.

I would recommend that you get set up with a discount broker that offers the ability to trade options, even if you aren't interested in options.  There are safe ways to use these investment vehicles, so don't rule them out too soon.  You may someday decide to try it out for yourself, and switching to a new brokerage account can be a pain.  It's better to have the ability to trade options and not need it, than to want the ability and not have it.


Don't be in a hurry to find the right online broker.  It's a decision you'll likely live with for a very long time.  Take the time to weigh this decision.


A FINAL WORD ON USING A DISCOUNT BROKER

Taking your investments into your own hands is one of the smartest things you can do.  Nobody else has your best interests at heart more than you do.  Even if all you ever do is purchase one mutual fund, at least you control what happens to it rather than relying on a third party, who probably won't pay much attention to what your investment is doing.



Congratulations on taking another step forward in becoming more faithful in your stewardship!



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