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Selecting an online broker

By Edited Nov 13, 2013 1 1

It is pretty hard for most of us to save up some money to invest. If you have decided to invest with an online broker this article will help you make the best choice for you.

The first question is how are you going to use this account? Are you going to use it for stocks, mutual funds options, or even futures? Different brokers cater to different investment styles. Next you need to know how much you have to invest. Many brokers have minimums; some have higher fees for lower amounts. How important is service to you, the lowest cost brokers tend to have lower quality service. If you are going to use this account to buy no load mutual funds then perhaps you should investigate using a no load mutual fund company as they often do not charge fees.

Do you feel more secure if the company also has an office near your home or can you live with an internet only institution? Many people do not consider this until they have a problem and cannot get through on the phone number.

Do you have other accounts now such as a 401K or IRA? Perhaps your 401K is with a large company such as Fidelity. That firm may offer you a package deal since you are an existing customer.

Do some research and google "online stock brokers". When your search results come up you are going to have some homework to do. You will find a lot of data to sift through. There are some online comparisons but you need to evaluate who is doing the comparison. If a brokerage house is doing the comparison they are always going to make their products look like the best ones.

Fees are a big issue with online brokers. Evaluate all fees for the brokers you are considering. Brokers may offer very low cost trades but sting you with inactivity fees and market data fees. There can be IRA fees, paper statement fees, electronic statement fees, exchange fees, odd lot stock fees and withdrawal and deposit fees. For sure fees can eat into your profits.

Customer service can vary. You are going to have to do a little testimonial work here. Perhaps you do not care about service and merely want to trade Service should be a consideration in your choice of online broker.

Choose your online broker wisely. Again you may be much better off with a mutual fund company. Please take your hard earned money and invest wisely!



Dec 5, 2009 1:29am
This is a great article and I am going to come back and refer to it when I begin looking for an online broker.
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