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Top Online Investment Brokers

Updated on September 4, 2012

Investment Strategy of Millionaires

According to the book, The Millionaire Next Door, the online investment strategy of millionaires will parallel their traditional investment and trading practices. The rich invest in markets they know. Once they carefully researched a firm and determined an expectation of long-term future success, they bought the stock. After purchase, they only infrequently check the status of the stock. This might be once a month, or only twice per year.

If you are a home builder, and see a new engineering firm with excellent turn around time and efficient solutions, this could be an investment opportunity for you. If you work in energy, and learn of a start-up biofuel company, and know new legislation requiring it will pass, that is something to invest in as well.

Online trading brokers can make investing much easier. Who are the best online trading firms?

Best Online Trading Brokers

This list of "Best Online Trading Brokers" is compiled using a very simple format. I found as many Best of and Top 10 lists as I could. Then, I averaged the rankings I found from 2011 and 2012. Where several categories of rankings were provided, I used the "overall" rankings.

The top five online trading sites are:

  1. vanguard.com
  2. tdameritrade.com
  3. scottrade.com
  4. schwab.com (Charles Schwab)
  5. optionsxpress.com (bought out by Charles Schwab in 2011, but operates independently)

Rules for Ranking the Best Online Investment Sites

First, I did not reinvent the wheel. Instead, I found the hard work put in by others. I also assumed that some of published rankings might be paid rankings or puppet sites.

Second, I used sites that gave a basis for their rankings.

Third, only brokers whose online investment sites appeared in more than one ranking are included in the top 12 list below. This tends to validate that their one and only ranking is not from their own puppet site. Note: a puppet site is one written by a business for the purpose of including it's own product alongside well-known, established products or services.

Fourth, where the average scores tied, I used the number of rankings first to break the tie, and then the highest rating second. Four sites averaged 5.0 and both these tie breaking rules were necessary.

Best Online Investment Brokers

Rank
Site
Number of Rankings
Highest Rank
Average
1
vanguard.com
2
3
3.5
2
tdameritrade.com
6
1
4.33
3
scottrade.com
5
1
5.0
4
schwab.com
5
2
5.0
5
optionsxpress.com
3
3
5.0
6
tradestation.com
2
1
5.0
7
fidelity.com
5
1
5.6
8
tradeking.com
3
3
5.67
9
etrade.com
6
1
6.17
10
optionshouse.com
3
4
7.33
11
trademonster.com
2
6
8.5
12
merrilledge.com
2
10
14.5
These are ranked using 2011 and 2012 rankings from Barron's, consumersearch.com, stockstogo, stockbrokers.com, businessweek.com, and Consumer Reports

Honorable Mentions

The following investment sites appeared in only one list. I ranked only those which appeared in at least two, however. Here are the one rank wonders:

  • sharebuilder
  • tdwaterhouse
  • zecco
  • usaabrokerage
  • mbtrading
  • interactive
  • brokers
  • lightspeed
  • choicetrade
  • eoption

Of these, two deserve special mention. These two were discussed very favorably in comments and in other articles: USAA Brokerage and Zecco.


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    • Mhatter99 profile image

      Martin Kloess 

      6 years ago from San Francisco

      Great tips. Sorry about that. :-)

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