How do i get started with a Brokerage account? Noob Questions

[joe189man]

Anyone have any good resources or suggestions on how to get started with a new brokerage account?

I am brand new to a brokerage account, i opened one at Fidelity this week.

i funded the account with $1k just to get started, but i am, being a noob, very confused. the $1k is in a government money market fund (SPAX), Fidelity says i have $1k available to trade and $0 settled cash.

i cant sell SPAXX as its a core account and cannot be traded directly, so how do i get settled cash to make a trade?

if i try to do an exchange, SPAXX for a Stock, every stock i have tried to buy is "closed to new investors" which seems unlikely?

i am sure i am missing something silly, this is my first account outside of the 401k and HSA

any advice or resource you may recommend would be helpful, thanks

[Sandi_k]

Many funds have a minimum amount to invest. VTSAX is $3k, for example...

[Frankies Girl]

The SPAXX is one of the options for the core account (cash) that is actually invested (its a gov't money market) so you'd need to sell it to get the cash but it should be giving you that option when you go to the "trade" or "buy" selections. There are a few choices there, but mostly just figure it's fine because it's just there for the cash part of your brokerage.

You should have the option to change your core account setting to FCASH, which literally is just a cash dump that doesn't do jack with the $ in it. If you really want it just cash and can't change the core position yourself, call up FIDO and ask.

But really, the SPAXX should absolutely be fine to trade/buy with. I have it as a core position in one of my accounts and there are zero problems using it to buy/trade with.  If you go to the TRADE section, you should see two lines:

Cash Available to Trade: $xx
Settled Cash: $XX

If you're no seeing SETTLED CASH matching the amount then there's your issue most likely. If it's only been 1 week and you just opened it, I'd call and ask what is the standard time to clear the settled cash.



What are you trying to buy? If you are trying specific stocks with a brand new brokerage, then it very well may be closed to new investors. I'm pretty sure that Fido did away with minimum investment dollar amounts for THEIR funds, but there may be some that are still restricted that are outside funds like VTSAX for instance (and I don't understand why you'd invest in Vanguard funds when there are Fido that mimic them without any buy/sell fees).

[joe189man]

ok, just spent some time chatting with a Fidelity Rep to get my questions answered

i am not trying to buy VTSAX

what i was seeing, as @Frankies Girl stated, i have $XXX dollars "available to trade" but $0 dollars in "settled Cash" which means that the funds from the electronic funds transfer haven't "cleared" yet

The error was as Frankies Girl said that the SPAXX is just where any new money put in the account sits until it is invested, and it can't be sold

the Warning message i was getting was in regards to having a $0 settled cash as the EFT has cleared my bank but not fully cleared Fidelity yet

The Fidelity rep said i can initiate a Buy of any stock or fund as long as i am making the trade in "Good Faith" as in i know the cash is real and available

[ctuser1]

I have never had to worry about selling SPAXX in my fidelity accounts. :-( Not sure if you have any special type of accounts or not that is different.

You have $1000 to trade. Just put in an order and it might just do all the selling SPAXX business for you. It does for me.

Which funds to use is another question. Fidelity has several zero cost funds with no minimum investment required. My daughter has a few hundred bucks in a UTMA account - all invested. She started with $50, invested in FXAIX. I think these funds (FXAIX/FZRO funds and others) should do just fine for a vast majority of index investors.


<Edited to add - I posted before reading all the posts. Looks like you get responses from Frankie's Girl and also figured it out by talking to the rep before my response.>

[MustacheAndaHalf]

"$0 commissions for online US stock, ETF, and option trades."
https://www.fidelity.com/trading/commissions-margin-rates

You should not buy Vanguard mutual funds at Fidelity - you'll incur a trading fee of $35 or $50 per trade.  Meanwhile, you can get the equivalent investment with ETF versions.  Instead of VTSAX (mutual fund), buy VTI (ETF).

To try it out, you might buy 1 share of VTI for $201.33, and that will give you one share, and then place -201.33 as waiting to settle.  In a few days, that -201.33 will get applied to your cash balance, so you'd go from $1,000 to $798.67.

[Rob_bob]

Wow, all of that sounds confusing.  I'm glad my account is with TDA LOL.