Investing stock

Invest in stock Buy Shares

How to Choose a Stock Broker for Online Trading

By

Before you can begin trading stocks online, you first need a brokerage account. In order to get one, you have to sign up with a stock broker. They are necessary on the execution of trade as it is carried out through them. But this being the internet and the choices so vast, how do you narrow down your picks to select the best option? Here are tips to help you out:

Pick a full-service broker

A full-service broker offers a range of services for their clients which include providing research and advice, retirement planning and offering tax tips – just to name a few. But given the kind of service they provide, it’s only natural that their commissions are a bit higher compared to a discount broker.

One of the advantages of signing up with a full-service broker is the expertise they can provide. For instance, if you’re extremely busy and haven’t kept up to date with issues that are complicated, full-service brokers can help you out.

Then again, when all you want to do is execute trades, you can go for discount brokers.

1

Make sure they are online at all times

A website breakdown during peak hours is something you don’t want in your broker. So if you have a list of potential list of candidates, try out their websites at different times and particularly during peak trading hours. Observe how fast their site loads and add in some link checking to make sure that there are no technical issues.

Check if they offer alternative trading services

An alternative trading service just means having the option to trade without using the internet. As much as our lives have now become glued to computers, there are instances when we don’t use them. So check whether your broker offers placing trades through telephone, fax and other alternatives.

Read up on the broker’s background

Reviews are not so hard to come by these days. A simple search on Google will reveal many things – some good and some bad. Plus, there’s social media as well where you can search to see whether mentions of a broker is more good than bad.

Of course, almost every firm will get an equal share of bashing and praising. It’s up to you to make the final decision. In case your still in doubt, try getting in touch with other online traders and learn about their experiences with their brokers.

mac-459196_640

Learn about their other product selections

Buying stocks isn’t all online trading is about. There are other investment vehicles such as municipal bonds, futures and options. If you’re interested in buying or selling more than just stocks, than it’s best to pick a broker that already has a varied portfolio.

Test their customer service

How a company treats their customers is very important when it comes to getting the best services. For your part, you can do some investigation on how well a broker’s customer service is by calling them up and see how they respond. Come up with a fake question to ask and judge them by the time it takes to have your call answered to the way your question was answered.

Look into extra offers

Some brokers offer extra services and it’s a good idea to check these out. While it may or may not affect your overall decision, knowing that you can get something extra is always a nice thought.

Takeaway

The internet has given us the option to buy and sell stocks without having to dress up. But in order to do it successfully, we need all the help we can get. And that’s what a stock broker is there for.

Fees I Should Know Before Investing in Stocks

By

Although investing can be done online – where a lot of things can be taken for free – there are certain fees involved. Put simply, investing has a lot to do with money. It basically deals with money. But the good thing is that you don’t need to have millions in order to start investing.

Then again, one of the keys to enjoying the investment process is knowing certain things beforehand, and one of them obviously has something to do with money. In this case, what are the fees to know about before investing in stocks?

Minimum Deposit Requirement

 Investing_money

The first thing you need to do when beginning to invest is to sign up with a brokerage firm. While this can be done online, the process is not free of charge. In fact, there are certain kinds of financial requirements too.

All financial institutions have what’s called a minimum deposit requirement. In short, a brokerage firm will not accept your application unless you can deposit a certain amount of money. In fact, some firms won’t even accept $1,000 as starting money. The good news is that there are certain firms that do.

Full-service or Discount Broker 

There are two kinds of stock brokers: full-service and discount. The former provides a variety of services, but in most cases, only deals with clients with a high net worth. In other words, you can see $50,000 as a minimum account size at full-service brokerages.

In other words, if $1,000 is all you have, your best bet of securing a broker is to go with a discount broker. A discount broker doesn’t request such high fees because of the simple fact that you make decisions on your own. With a full-service broker, you get the benefit of their advice. In short, you’re left to your own devices with a discount broker.

Some discount brokers accept a minimum of $1,000 as their deposit requirement. However, this doesn’t mean that you’re sure to get in as well. You still have to shop around for a broker that will actually take you in.

Commissions

 business-world-541431_640

When you purchase investments, you incur costs (through commissions). You have to pay a trading fee each time you trade stock, whether you buy or sell. The fee can be as low as $10 but can also be as high as $30. Keep in mind that a trade is an order to buy shares in one company. In case you want to buy three different stocks at the same time, these represent three separate trades where you will be charged for each one.

Mutual Fund Fees 

Mutual funds refer to a collection of investments. Most often, they are a collection of various stocks, but can also include bonds, precious metals, foreign currency and real estate, among others. These investment vehicles come with fees called an “expense ratio” which refers to the value of the fund that is used up each year in order to employ those running the fund, and of course to earn them profit.

Also called management expense ratio or MER, the expense ratio is put simply, the amount that you’re charged by the management team per year based on the number of assets in the fund. So the bigger the MER, the worse for the investors of the fund.

Takeaway 

Investing in stocks requires money, but you can also be comforted by the fact that you don’t need millions in order to begin trading. Knowing the different kinds of fees involved when trading stocks makes you better acquainted with the system and as such, helps you become a better trader as you continue along.

XSLT Plugin by Leo Jiang