Best Online Brokerage for Beginner

[sirraf69]

I had posted about my pension and 401k in previous post. I have decided to put the money into a traditional IRA. I've looked at many online brokerage to do this, but was curious which would be best for a beginner like me? I don't plan on buying and selling stock very often, but would like that option when I want. Would like one that is user friendly and can provide information when needed. Seems like ETrade and TD Ameritrade is a viable option. Any other recommendations? Thanks

[cardtrick]

Vanguard. Their funds and ETFs are commission free. Plenty of low cost funds which are great for passive investors. Stocks are $7 per trade if you have more than $50K (first 25 per year are $7 if you have less than $50K) and $2 per trade if you have more than $500K.

https://personal.vanguard.com/us/whatweoffer/stocksbondscds/feescommissions

[sirraf69]

Thanks Cardtrick. I had looked at them also, but didn't know how user friendly their site is? I like the low fees of course.

[snafu]

gu

I've just read A Hallam's 'Millionaire Teacher,' who suggests www.Vanguard.com, www.Asset Builder.com [Texas based], www.rwinvestmentstrategies.com/background.html [Maryland], www.evansonasset.com [California] as low cost, low fee providers. I hope you've carefully considered allocation. It's cost efficient to stick to Index Funds for USA, International and short term corporate Bond [due to the likelihood that interest rates will increase over the long term]. You can always make changes as you become more experienced/comfortable as an investor.

I too am a fan of Vanguard's methodology and philosophy. There will be an initial fee unless you can meet their fee-less parameters.

[kv968]

Vanguard, Scottrade, Schwab, Fidelity are all good choices with similar commissions. Scottrade however doesn't have commission-free ETF's available like the others do.

TD Ameritrade might be a bit much for a beginner. They're a little more expensive that the others, most likely due to the amount of information they provide on their platform. Most of which you probably won't use so why pay for it?

[sirraf69]

Thanks everyone for the replies. My total amount to deposit will be around 68K. If I went with Vangaurd, any suggestions of what to invest in? Does it work like my 401k and I put so much percentage into different funds? I'm assuming I can put so much in funds and so much in stocks.

[snafu]

If it's your intention to buy a combination of Mutual Funds [MF] as well as some specific stocks, I suggest you look at the top 10 holdings in the MF so that you are not overlapping. I hope you understand that stocks are also called equities, different term for the same thing.

As a beginner it's easiest to start with an Index Fund which is a huge basket of stocks sold on the American Stock Exchange. Be prepared to see it's unit value both increase and decrease day to day based on investor sentiment, the economy, international incidents, stupid remarks by politicians and luck. If the Dow goes down, I read it as USA 'sale.'

It's considered safer to subdivide your investments into separate parts. Bonds and CDs [Certificate of Deposit] are loans you are making either to some level of government or 'Corporate' some big company. Bond value is tied to interest rates. When interest rates go down, Bond values goes up because you have loaned the government money at 5% for example and now interest rates are down to 1.1%. If interest rates are going up, Bond values go down because Bonds [loans] that had been issued at 1.1% are paying you less than new Bonds issued at 5% interest. It's really tricky. At this point in time the government has borrowed $ 17.5 billion dollars. If they increase interest rates, the government will have to pay a higher interest rate as they are the biggest borrowers.

The 3rd money question is what is happening in the rest of the world. Some of us buy International MFs so that if another country operates a really successful business and economy we get a tiny bit of their success. From 2000 to 2012 or so, China's economy flew up faster than anyone imagined for example. Of course they came up from a very very low starting point. I've lived in China and it's still very startling to see a farmer sloshing through water about at his kneecaps, hand pushing a plough strapped to his one ox through the rice patty...while he's talking on a cell phone to his daughter somewhere in San Francisco! The 18th century and 2014 mesh..

[feh]

Thanks everyone for the replies. My total amount to deposit will be around 68K. If I went with Vangaurd, any suggestions of what to invest in? Does it work like my 401k and I put so much percentage into different funds? I'm assuming I can put so much in funds and so much in stocks.

Vanguard is a fine choice.

The next step is to do some reading. Start here:

http://www.bogleheads.org/wiki/Bogleheads%C2%AE_investing_start-up_kit

[sirraf69]

Thanks again everyone for the info, and thanks feh for the link.

[Petunia 100]

Thanks everyone for the replies. My total amount to deposit will be around 68K. If I went with Vangaurd, any suggestions of what to invest in? Does it work like my 401k and I put so much percentage into different funds? I'm assuming I can put so much in funds and so much in stocks.

If you're going to trade individual stocks, you're going to pay commissions pretty much anywhere. The only method I know of to get free trades on individual stocks is to look for a banking relationship which allows it.

For example, I have a Wells Fargo PMA checking account and a Wells Fargo brokerage account (my traditional IRA). Because I have the PMA, I receive 100 free trades per year in my brokerage account. The PMA checking account monthly fee of $30 is waived if you have at least 50k in all linked Wells Fargo accounts. I believe Bank of America offers a similar deal. Maybe more banks do too.

Or, you might just skip trading individual stocks and stick with stock mutual funds or stock ETFs. That's what I recommend.

[moneysma]

I'd recommend either Schwab or Scottrade. I've used Schwab now for almost 10 years and love them. No fee mutual funds and no fee on a bunch of ETFs. The fee for stocks is only $9.

[Retired To Win]

If you're going to trade individual stocks, you're going to pay commissions pretty much anywhere. The only method I know of to get free trades on individual stocks is to look for a banking relationship which allows it.

For example, I have a Wells Fargo PMA checking account and a Wells Fargo brokerage account (my traditional IRA). Because I have the PMA, I receive 100 free trades per year in my brokerage account. The PMA checking account monthly fee of $30 is waived if you have at least 50k in all linked Wells Fargo accounts. I believe Bank of America offers a similar deal. Maybe more banks do too.

Or, you might just skip trading individual stocks and stick with stock mutual funds or stock ETFs. That's what I recommend.

Yes, Bank of America has a free trades deal also. I get 30 free trades a month at Merrill Edge as long as I have at least $25,000 combined between my Merrill Edge brokerage account and my Bank of America bank account. This saves me over $1000 a year in commissions (compared with my Schwab brokerage account).

[Zedon]

Do any of these allow free trades in an IRA?

I wish i could pay for my trades from outside of my IRA.