Does anyone know about on-line brokers?

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slabinja's picture
slabinja
Status: Bronze Member (Offline)
Joined: May 27 2008
Posts: 46
Does anyone know about on-line brokers?

Could some of you knowledgable individuals out there enlighten me what occurs with an on-line broker?

Personally, I don't see my self ever using one in the near future, since I don't plan to get any stocks till after this crisis subsides, and might not use one ever.

Nevertheless, I am interested in what this does offer or how you might use one.

Thanks for any future input.

 

 

Gadfly's picture
Gadfly
Status: Silver Member (Offline)
Joined: Dec 5 2008
Posts: 127
Re: Does anyone know about on-line brokers?

It's a great idea.  I also recommend joining Amway and becoming a registered Democrat.

BSV's picture
BSV
Status: Silver Member (Offline)
Joined: Jan 26 2009
Posts: 170
Re: Does anyone know about on-line brokers?

Slabinja:

I'm a retired financial advisor and so I know a bit about this subject. I suggest that -- when the time comes -- you establish a brokerage account with Vanguard. The URL is www.vanguard.com. Vanguard is unique. Virtually all mutual fund companies are investor owned. In other words, someone is out to profit from fees generated by your business. And that's just fine. This is, after all, America. We believe in free enterprise, life, liberty and the pursuit of money (also known as happiness). It would be nice if our money were an actual store of value like it's supposed to be, but I digress.

Vanguard is basically what amounts to a consumer cooperative. In other words, Vanguard mutual fund shareholders are the owners of the company. Vanguard's mutual fund fees average about one sixth of what most mutual fund companies charge. This is huge. Keeping your transaction costs to a minimum is the single biggest factor you can control in your investment decisions.

Now, I need to clarify a point here: Your question is about on-line brokerages. Vanguard is principally a mutual fund company, though they also offer an excellent selection of Exchange Traded Funds and a brokerage service. Once you are established as a Vanguard customer, you can set up a brokerage account. Their fees are quite reasonable. If you are looking for the cheapest possible brokerage fees, you can keep looking. But Vanguard fees are very good and it's a solid organization. Order execution is excellent in my experience and that's important I have only good things to say about Vanguard. The only negative in my experience is the size of the organization: phoning them can result in holding for an extended period of time, but the wait is worthwhile in my view. I do my own Vanguard account trading on-line and find it quite efficient and fast.

Most financial advisors won't recommend Vanguard because they don't get paid to do so. But you benefit from their much lower fund fees. If you need advice, suck it up and pay someone to provide it (sucker!). But if you can make your own financial decisions (recommended; read Money and other financial magazines) you can do pretty well with Vanguard. You are not going to get any "hand-holding", but if you need that you probably don't need to be buying stocks or mutual funds in the first place.I suggest caution in every financial transaction you make. Take the time to think it through before you pull the trigger. Best wishes.

 

plantguy90's picture
plantguy90
Status: Gold Member (Offline)
Joined: Jan 26 2009
Posts: 271
Re: Does anyone know about on-line brokers?

They are convenient, and you cant beat the new low commissions, excecutions are pretty good and timely, its my internet connection that delays my orders nowadays.  One caveat is my broker Etrade as a company trades around a buck last time I checked, so they are in the in the same herd as all the big name banks I assume.  Etrade bank has only a 2 star rating, so they must have some non-performing loans or "toxic assets" on their books.  

slabinja's picture
slabinja
Status: Bronze Member (Offline)
Joined: May 27 2008
Posts: 46
Re: Does anyone know about on-line brokers?

BSV:

Thanks for the information.  I get the impression that you are not too sold on brokers.  I have had mixed results with brokers, but anytime I did my own picks, I ended up for the most part ahead.  Any losses were minimal.   However, I did make the picks when the market kept going up, so there wasn't the volatility that there is now. I'm currently rereading Naseem Taleb's "Black Swan" just to stay focused on the whole notion of "unpredictability."  He believes that everything is so interconnected now that Black Swan events (rare events) can be devestating on a level that in unprecedented.  In respect to the financial sector, we should all be aware of this, question everything and not take anything for granted. 

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