Brokers

Whenever we learn about something new it’s important to start with the basics. This is especially vital when you are learning about something that will impact your financial decisions. Stock trading for dummies provides a quick overview of the world of stock trading, including some of the different investment options and the services you use to facilitate these investments.

The basics discussed here include the nature of the stock market, mutual funds, index funds, brokerages, online brokers and online stock trading. Understanding these basics will help you navigate the world of stock trading and help you find the right type of investments for your personality, your expertise and your budget.

One of the important aspects of any type of online stock trading involves finding the best online stock broker for your needs. Keep in mind you may not want to use the same brokerage account for long term investments and penny stock trading because they are two very different types of investments. Choosing the right broker can help you save money and maybe even make more money.

There are full service brokers, discount brokers and a little of everything in between. As the name suggests full service brokers provide more tools and services, but these tools and services usually come with higher account fees or trading costs. Discount brokers are cheaper in terms of fees but they don’t offer much in the way of help. There are also options in between, that offer a few services without high fees. It is important to evaluate everything from fees, minimum balances and services provided as they all add up to create a good or not so good overall trading experience.

This guide will discuss ten of the top online brokers from big names, like Charles Schwab and Fidelity to lesser known players like MB Trading and Scottrade, offering a summary of the services provided, account fees, account minimums and trade fees.

One of the most common — if not the outright most common — questions I receive is, “How do I buy stocks on line? I think one of the most important ways to answer this is not with a direct answer but rather with a series of questions that helps the questioner understand the complexity and weight of that question.

In all likelihood, if someone is asking this question they are new to online investing. That can be a very precarious and vulnerable role to play these days, as these Internet waters are infested with fraud-perpetuating sharks. So come along with me as I examine what someone asking about how to buy stocks on line is really asking. Keep in mind the answer to this question can also vary based on what type of stocks you are considering, for example someone looking to get into online penny stock trading may use different tools than someone trying to diversify their retirement portfolio.