Author Topic: How to choose the ideal stock broker?  (Read 422 times)

vinnybagodonuts

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How to choose the ideal stock broker?
« on: June 12, 2019, 10:15:21 AM »
I plan to open a vanguard account to start investing in index funds. In addition, I would like to buy individual stocks and from what I've read it seems there are better options like e-trade, Schwab or fidelity to name a few.

As a new investor, my priority is on low commission fees as I will not be investing huge sums of money. Is this the right approach or should I be considering other factors as well? Thanks!

bacchi

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Re: How to choose the ideal stock broker?
« Reply #1 on: June 12, 2019, 10:24:36 AM »
If you want to dabble in individual stocks, use only a very small percentage of your net worth, like 5%. Seriously.

Any of the large brokers are fine. Compare their commissions. Some of the robo brokers (like M1) are fee-free but only invest once/day.

You'll almost certainly be richer if you just invest in index funds/ETFs though.

Bernard

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Re: How to choose the ideal stock broker?
« Reply #2 on: June 14, 2019, 04:40:18 PM »
I'm a huge fan of Vanguard, as are most folks here, but if you want to play with individual stocks anyway, know that some brokerage firms offer fee-free trades and the same deal as Vanguard. I have plenty of VTI, VOO, and VGT in my ETrade account, purchased with $0 fees and I get the same ultra low 0.04% expense ratio I'd get at Vanguard directly. I personally like having all my investments under one roof.

Financial.Velociraptor

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Re: How to choose the ideal stock broker?
« Reply #3 on: June 14, 2019, 05:25:45 PM »
Depends on what you want to do.  Interactive Brokers is the best option for me.  Low pricing, excellent execution.  Essentially no tools.  They won't hold your hand or provide any type of "premium" customer service features.  But you can trade bonds without calling a bond desk as long as you know your CUSIP#.  You can even use a good till canceled limit order for bonds.  Minimum lot size is also usually 2 bonds which is much lower than most brokers.  They do not however have a free option for real time quotes without 30/mo in commission spend.  But can't beat their pricing for small lot sizing.  In most cases, it sounds like you would pay the minimum commission of $1.

flipboard

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Re: How to choose the ideal stock broker?
« Reply #4 on: June 15, 2019, 01:33:12 AM »
I plan to open a vanguard account to start investing in index funds. In addition, I would like to buy individual stocks and from what I've read it seems there are better options like e-trade, Schwab or fidelity to name a few.

As a new investor, my priority is on low commission fees as I will not be investing huge sums of money. Is this the right approach or should I be considering other factors as well? Thanks!
Schwab and fidelity (and seemingly e-trade) are quite expensive: 5-6$ per trade. Some of them have deals to give you free trades, e.g. transfer 100k to Schwab and you'll get 200 free trades for 2 years.

Schwab and Fidelity both offer free access to a good selection of commission-free ETF's, so either of those is good as a general platform for your primary (index) investments - to avoid having 2 accounts. (Also less customer service screwups, and slightly lower TER's in general.)

Interactive Brokers are probably the cheapest in general (without having to jump through hoops for free trade deals for new customers), at min $1 per trade (0.5 cents per share, but that only becomes > $1 for large orders). BUT: they charge you $10 monthly (minus trade commissions in that month) if you have less than 100k with them.

The real time quotes thing with Interactive Brokers isn't a huge deal: most people I know check prices on yahoo finance, and then enter their orders into IB. But it is slightly annoying, and the IB user interface is pretty complicated. So I wouldn't really recommend them if you can just go with one of the big ones (Schwab, Fidelity, maybe VG).

MustacheAndaHalf

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Re: How to choose the ideal stock broker?
« Reply #5 on: June 15, 2019, 01:10:02 PM »
Fidelity and Schwab charge $4.95/stock trade:
https://international.schwab.com/public/international/pricing_services/fees_commissions
https://www.fidelity.com/why-fidelity/pricing-fees

Vanguard charges $7/stock trade for those under $500k in assets, and $2/stock trade after that.

It looks like the right choice depends on your level of assets.  Most people aren't buying $19,000 worth of Apple stock at once, but if you do it looks like interactive brokers charges $1 for buying 100 shares, but as an earlier poster said you pay $10/month there (until you have $100k in assets).
https://www.interactivebrokers.com/en/index.php?f=4969