There is no way I'm wasting precious money spending $10 or more per trade with my stocks!
Like I wrote last week, I overheard once a group of interns a summer ago talking about cheaper stock trading on certain websites. Here are my reviews of the top less-expensive trading sites I could find. Comment if you know of another one I didn't include; I would certainly love to look into those as well.
Just a little background... turns out these companies are more officially called "discount brokerage firms." And for a price comparison, some of the more traditional players include Charles Schwab, which would probably cost me $12.95 since I'll likely do less than 120 trades a year and have less than $1M to trade, or TD Ameritrade, which would probably cost me $9.99 per trade, or eTrade.com at about $7 per trade up to about $10.
Bank of America: Yes, I know they're not exactly a discount broker, but I need to review them as one of my options because I'm a customer there, and often you can maybe get better trading deals if you already have money with them.
Says they have online equity trades as low as $0, and no minimum investment, with a $50 semi-annual fee. This would clearly be the best deal, but of course need to read the fine print on the $0 trades to see if it would apply to me. It doesn't per se. Basically, I would qualify if I had $25,000 in all of my Bank of America accounts. Well, my checking account has a small ~$450, and even if I transferred over all my money from my savings accounts at Merrill Lynch (~16,000), I still wouldn't have enough to qualify. It is a pretty good deal though if you do have the money with BoA. The $0 per trade is good for 30 trades/month, after that it's up to about ~$10 a trade (for students, among other groups that qualify), so it's not bad. I would definitely go with that one if I had more money with BoA... doubt my parentals would get me an account through them... they definitely qualify... hmm, that'd be interesting.
Zecco.com: Besides the financial social networking aspect that they've tried to incorporate (I'm not so interested in that when it comes to my investing... but maybe some would find it useful to have a collaborative aspect to their investing experience), if you have over $2500 with them, it's 10 free trades per month. I, of course, would have only $500, so for that amount it would cost me $4.50 per trade... not too bad.
TradeKing.com: Costs $4.95 per trade, no matter what. With an extra $.65 for options trades. Also, not bad. But clearly Zecco beats this one out. Their options contract fees are less too at $.50.
Sharebuilder.com: I was really excited that Alex from the Young Professional Finance Blog dropped by the Dressed to Invest blog to recommend this website, so I looked into Sharebuilder to include in the review also. Without a subscription, it's $4/trade. What throws me off a little is that it's by programmed trading only, so that means realtime trades would be more pricey at $9.99 -- not exactly discount. With a standard account, you pay a $12 subscription fee, get $2 trades plus 6 free ones per month, but again to do realtime trades it's $9.99. Also, you can invest any amount on Tuesdays. This is a really interesting set-up; it appears to me that basically the real time trades are more expensive, and instead this system favors building up your portfolio over time (so for example, if you get your paycheck in every other Monday, you can setup your Sharebuilder account to buy a certain amount of a certain stock on Tuesday, and it'll take it directly from your checking or savings account for free). This is really ideal I think if I was looking to have this be my investment strategy overall. But really I need the cheapest trading option available for this project, since I already invest the majority of my money elsewhere. Having $9.99 trades is more than I'd like to pay.
SogoTrade.com: This site definitely seems to be the best deal. With a standard account I'll be paying $3 per trade, which is the best of any site so far reviewed. No monthly subscription or anything like that. I think the minimum is $500 so that's fine with my needs. And then a premium account, I'd be paying a $10/month subscription, but trades are $1.50 only. They also have a promo right now for 100 free trades when you sign up.
So there you have it ladies and gents! I think SogoTrade is the clear winner here; definitely the one I'll be going with it seems... unless I hear from my parents about the B of A deal...
Wednesday, June 25, 2008
Friday, June 20, 2008
The first hanger: talking to Dad
I had the idea, I have the blog, but now, I have to talk to Dad.
Turns out my savings account at Merrill Lynch has both our names on it, so I can't take out any amount of the $1000 present without his approval.
I figure though, before sending him a link to this blog, that I will put together my plan for how I'm going to go about investing.
First off, during an internship last summer, I overheard fellow interns discussing investment practices, sharing advice over which online trading sites are best. Apparently, in addition to the main players, there are online trading sites that specialize in off-hour trading that is cheaper. I think this may be the way I'll go in terms of how I'll trade, but I'll do a roundup of reviews for those sites early next week (admittedly, I know very little about any of these at present, but hopefully after clicking around their sites, I can choose a good one).
Second, obviously, I'll need to choose which stocks I'll buy. I started looking early in the evening yesterday, but I actually have no idea how to really start. Obviously there are so many stocks to choose from, and they always say ("they" being Warren Buffett, I believe) that you should invest in what you know, so I just hope it'll all sort itself out, and I can pare all the options down to find the perfect combination worth $500.
Turns out my savings account at Merrill Lynch has both our names on it, so I can't take out any amount of the $1000 present without his approval.
I figure though, before sending him a link to this blog, that I will put together my plan for how I'm going to go about investing.
First off, during an internship last summer, I overheard fellow interns discussing investment practices, sharing advice over which online trading sites are best. Apparently, in addition to the main players, there are online trading sites that specialize in off-hour trading that is cheaper. I think this may be the way I'll go in terms of how I'll trade, but I'll do a roundup of reviews for those sites early next week (admittedly, I know very little about any of these at present, but hopefully after clicking around their sites, I can choose a good one).
Second, obviously, I'll need to choose which stocks I'll buy. I started looking early in the evening yesterday, but I actually have no idea how to really start. Obviously there are so many stocks to choose from, and they always say ("they" being Warren Buffett, I believe) that you should invest in what you know, so I just hope it'll all sort itself out, and I can pare all the options down to find the perfect combination worth $500.
Thursday, June 19, 2008
Getting dressed to invest
Ah, the first post of a new blog.
A few weeks ago, I got a call from my grandfather who lives just a few thousand miles away saying that he wants to give me $1000. He told me it's his congratulations gift to me for successfully being able to pursue studying business. I was pretty happy already to have been accepted to the rather competitive undergraduate business program, but getting one grand on top of that is honestly, even better.
But, the question loomed of what I was to do with my new-found funds. With the rush of finals and a summer trip and starting work since my grandfather's phone call, I sort of just put the money on the shelf; aka, the savings account. But tonight, as I was changing into my pajamas after a long day at my internship job in the City, it came to me: invest it.
But, I figure I've got to be smart about it. So, I'll keep half of it where it is, and use the other half to day trade (haha. I know plenty of readers will already catch me there... day trading? smart?). But alas, I have (perhaps naive) confidence that if I really dress the part, I might make some nice return in this venture. So, let's review the outfit:
1. $500 starting funds
2. Must plan before buying any stocks, bonds, currencies, etc.
3. Will blog about all that happens along the way to keep myself on track, and to share experiences with other young investors
4. The overall monetary goal (hopefully not too ambitious): turn the $500 into $1000
5. Keep the blog interesting too! I'll try to incorporate any advices, news, or thoughts about young people and investing along the way.
And, a little about me (although I figure other details will crop up as the blog rolls along): I'm a rising junior at the University of California, Berkeley, who was accepted to the rather competitive undergrad business program at the Walter A. Haas School of Business. I start classes this summer, so if I hear anything interesting there about investing strategies, etc. I'm sure I will share that here.
Also, I am rather resolute on trying not to commit too many of the most obvious mistakes of blogging (although clearly I've already violated the first one!), so I want to let all the readers know from the start to expect posting about once a week.
And finally, any feedback or suggestions, please leave a comment; I'll be sure to get it because I am, at least for now, deciding to hold all comments for moderation.
So, that's the plan -- let's get dressed to invest, y'all.
A few weeks ago, I got a call from my grandfather who lives just a few thousand miles away saying that he wants to give me $1000. He told me it's his congratulations gift to me for successfully being able to pursue studying business. I was pretty happy already to have been accepted to the rather competitive undergraduate business program, but getting one grand on top of that is honestly, even better.
But, the question loomed of what I was to do with my new-found funds. With the rush of finals and a summer trip and starting work since my grandfather's phone call, I sort of just put the money on the shelf; aka, the savings account. But tonight, as I was changing into my pajamas after a long day at my internship job in the City, it came to me: invest it.
But, I figure I've got to be smart about it. So, I'll keep half of it where it is, and use the other half to day trade (haha. I know plenty of readers will already catch me there... day trading? smart?). But alas, I have (perhaps naive) confidence that if I really dress the part, I might make some nice return in this venture. So, let's review the outfit:
1. $500 starting funds
2. Must plan before buying any stocks, bonds, currencies, etc.
3. Will blog about all that happens along the way to keep myself on track, and to share experiences with other young investors
4. The overall monetary goal (hopefully not too ambitious): turn the $500 into $1000
5. Keep the blog interesting too! I'll try to incorporate any advices, news, or thoughts about young people and investing along the way.
And, a little about me (although I figure other details will crop up as the blog rolls along): I'm a rising junior at the University of California, Berkeley, who was accepted to the rather competitive undergrad business program at the Walter A. Haas School of Business. I start classes this summer, so if I hear anything interesting there about investing strategies, etc. I'm sure I will share that here.
Also, I am rather resolute on trying not to commit too many of the most obvious mistakes of blogging (although clearly I've already violated the first one!), so I want to let all the readers know from the start to expect posting about once a week.
And finally, any feedback or suggestions, please leave a comment; I'll be sure to get it because I am, at least for now, deciding to hold all comments for moderation.
So, that's the plan -- let's get dressed to invest, y'all.
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