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Advice on selecting an online broker.

Updated on August 14, 2015

Questions to ask yourself

You probably worked pretty hard for what you have earned and you want to make the most of it. If you have decided to invest your money into an account with an online broker, this article will help you in evaluating the best online broker for you needs.

Decide how you are going to use this account. Determine how much you are going to invest. Do you want to trade options or stocks? How many trades do you intend to make? This one is a little tricky as you get more experienced you may trade more often or less often. Is service important to you? If you wish only to buy mutual funds perhaps you will be better served by going to a mutual fund company.

Do you feel more secure if the company also has an office near your home? Will an internet only company be satisfactory for you?

Where you have accounts now? Perhaps your 401K is with a large company such as Fidelity. Often they will offer you a better deal since you are an existing customer.

Finding the right broker can save you cash!

You work hard for your money!
You work hard for your money!

Do some investigation

Google “online stock brokers” and a lot of information will come up. You will need to sift through a lot of data.

Fees are a big issue in the selection of an to online broker. Evaluate fees for all of the brokers. Some brokers offer $1 trades but have inactivity fees and market data fees. I have seen IRA fees, statement fees, odd lot fees, exchange fees, withdrawal fees. I am sure that there are some fees I missed here. If you see a fee I missed please feel free to leave a comment below. Fees can make investing an uphill battle. Fees often vary based on how often you trade.

Some brokers have absolutely awful customer service. A little investigation on the internet will tell you just how bad their service is. Perhaps you do not really care about service.

There are a number of websites which compare online brokers. Words of caution here, many of these websites are geared to make one broker stand out as the best. Look to see who is missing. More than likely the broker not mentioned in the comparison is a better choice. The broker will compare themselves against the poorest completion. Most NFL teams could make the playoffs if they played the Detroit Lions and teams of equal quality every week.

Ask yourself do I really want to use an online broker? What will this do to my asset allocation? Many of us were taught by well meaning but misguided teachers in school to buy stocks. We were not taught about no load mutual funds. It is very hard for the average individual to select the right stocks for our portfolio. You may be happier in the long run investing with a great no load mutual fund company.

Are you interested in the best no load mutual funds? Help in selecting the best mutual funds for you are just a click away.


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      james moylan 7 years ago

      I have a web site where I research stocks under five dollars. I have many years of experience with these type of stocks. I would like to recommend a stock broker that has no minimum amount to open an account you can open an account for just 10 dollars if you like the broker is

    • Daddy Paul profile image

      Daddy Paul 8 years ago from Michigan

      Thank you John.

      I am going to guess you work with Interactive Brokers.

    • profile image

      John 8 years ago

      Hi Daddy P - Liked your blog. I certainly agree you should do your research before you select a broker. I am using an online broker at the moment that charges only $1 commission per trade. But I know plenty others that charge from $10-$20 per commission. What a rip off eh? thanks. J