Slashdot Mirror
Best Online Trading Company?
Stacy Uden asks: "What is your favorite online trading company? Which one is the best? I am a newbie to online trading, and I am looking to jump into the game. I have heard good things about E*Trade, Charles Schwab, and Vanguard, but I would like to hear the opinion of the Slashdot community! "
Online you pay $10-$30 for a trade, locally you pay $100 for a trade. Online you have no help, noone with expirence. Locally you can talk to someone with expirence.
Unfortunatly most local brokers are just phone slaves who want to sell you something to make money. There are some good ones who really care.
I only recomend these because it APPEARS that you know nothing about investment, other then you have a lot of money. The stock market can be worse then Vegas for turning a lot of money into a little. The current market allows many people to make a lot of money, but history shows that other markets like this often have the bottom drop out and you lose all the gains very quickly. That isn't to say that stocks are bad investments (something that only history can show conclusively) Only that you need to do a lot of homework before you invest.
That said, I have accounts with E*Trade and Morgan STanley Dean Wetter. The latter charges way too much, and I'm planning to get away from them in the future. I don't have much expirence trading either though, we are after all talking about my money, but once it hits the stock market it is subject to lots of pressures I have little control over.
Though I admit that it is at least partially my fault.
I don't mean that you should use the expensive local guys. However you should check them out. If you make one trade a year or less, they are not very expensive and the advice can be worth it. (can of course) If you make many trades it isn't worth it, but day-trading is a very dangerious move, and you should really follow the stock market for a long time before you do it.
There are many books on investing. I've seen criticisms of all of them, though some are overall good books and some are not. (even by the same autheors some books may be bad advice while others good) If your only going to read a few books, I'd recomend something by Benjiman Gramms. (I think he wrote his last book in the '30s though I could be wrong) His mythods are amoung the few that have stood the test of time. Warrent Buffet is one of his students, and also one of the richest investors in the country.
In the end, it is your money, and you CAN lose it all. I cringe when I hear of a good geek who thinks that because he is smart he should be able to make money in the stock market. While there is money to be made, there is also money to be lost. (while the indexs are up, the average stock lost money last year) Picking the winners isn't easy. Unfortunatly some investors are stupid, and pay outragious prices for bad stocks while letting good stocks lag. (sometimes they should lag) In the end you have to predict not just what intellegent people will do in the market, but also what the idiots will do.
I won't even get into options, shorts and other trades that reflect (and perhaps change) this price of a stock while allowing you to make money on the downside of a stock with completely different risks.